Madam Speaker, while I welcome this opportunity to speak once again to Bill C-10, an act to amend the Air Canada Public Participation Act and to provide for certain other measures, I am disappointed that the bill has come back from committee without amendment, after Liberal members voted unanimously against an amendment that would have respected the requests made by both the Government of Quebec and the Government of Manitoba to delay the bill's coming into force. However, I will speak to this specifically later on in my remarks.
Upon its privatization in 1989, Air Canada was subject to four conditions: the carrier would be subject to the Official Languages Act; the carrier's headquarters would be in Montreal; 75% of the company's voting shares had to be held by Canadians; and overhaul maintenance was to be done in Montreal, Winnipeg, and Mississauga. The last condition of the act regarding aircraft maintenance is the subject of the legislation that we are debating here today.
I do not think this point has been made clear enough, so I will repeat it again. The Government of Quebec, with the Government of Manitoba as an intervenor, brought Air Canada to court to challenge the carrier's assertion that it was fulfilling its obligations under the Air Canada Public Participation Act, after Aveos Fleet Performance, its primary maintenance provider, went bankrupt and Air Canada was forced to get its overhaul maintenance work done outside its traditional maintenance centres in Montreal, Winnipeg, and Mississauga.
The Superior Court of Quebec ruled on February 4, 2013, that Air Canada had not fulfilled its obligations under the act. The Court of Appeal of Quebec ruled on November 3, 2015, that Air Canada had not fulfilled its obligations under the act, and again, just two months later, on January 5, Air Canada asked the Supreme Court, Canada's top court, to overturn the Quebec court of appeal's decision.
Bill C-10 would, for all intents and purposes, remove Air Canada's obligation to do its overhaul maintenance in these three specific geographic locations that were named in the original act. According to the Minister of Transport, the legislation was introduced, “As a result of the decision by the Quebec government and Manitoba government not to litigate any further against Air Canada, we felt this was an appropriate time to clarify the law and modernize it so that Air Canada can compete with the rest of the world.”
The minister also noted that the legislation would help additional litigation against Air Canada in the future. This statement is fraught with problems. First, it goes without saying that if we change the law that governs Air Canada's privatization, it will become more difficult for anyone to challenge Air Canada in court on whether the carrier is respecting the law as the maintenance provisions will be deemed never to have come into force.
Second, the governments of Quebec and Manitoba do not need to litigate further against Air Canada, because they have already won in court twice. It was Air Canada that opted to continue litigation all the way to the Supreme Court.
The minister's statements lead me to believe that he does not have his facts straight. We have heard the Minister of Transport, and every single member of the Liberal Party in their defence of the legislation, talk about job creation in Manitoba and Quebec, and Bombardier and centres of excellence in aircraft maintenance. However, I do not understand the link these topics have with Bill C-10.
Bill C-10 would replace the paragraph of the original act that described Air Canada's obligations on aircraft maintenance with the following:
(4) For the purpose of carrying out or causing to be carried out the aircraft maintenance activities referred to in paragraph (1)(d) in Ontario, Quebec and Manitoba, the Corporation may, while not eliminating those activities in any of those provinces, change the type or volume of any or all of those activities in each of those provinces, as well as the level of employment in any or all of those activities.
The floor on the number of jobs in each province is one. Although it does not specify the nature of the work that has to be done, line maintenance would probably apply. However, neither the minister nor his officials were able to provide the committee with the minimum number of maintenance jobs Air Canada will have to keep in the country. His officials stated that they could not speculate on how Air Canada would operationalize the centres of excellence, or the 150 jobs in Winnipeg, yet that seems to be all that the Liberal members can talk about.
We are here discussing the Air Canada Public Participation Act, not Bombardier, not the C Series, not the centres of excellence. I hope that members will keep that in mind and try to keep their comments on the Air Canada Public Participation Act for the rest of this debate.
If members would like to discuss agreements between Air Canada and Quebec, and Air Canada and Manitoba, for the creation of centres of excellence, I would expect that they could table these agreements because, despite my best efforts in requesting them, I have not seen any.
Coming back to the sequence of events that have brought us here today, Air Canada likes the C Series airplane. That has been made clear. It made that clear during its appearance last week. However, as recently as January 5, Air Canada's plan was to appeal the Quebec court of appeal's decision to the Supreme Court. Something changed and Air Canada decided that it was better off settling these lawsuits than pursuing this matter in front of the Supreme Court.
Whether the federal government was somehow involved in this change of heart is unknown, beyond a statement made by Air Canada's representative that it is acting under the assumption that the section of the Air Canada Public Participation Act that we are discussing right now will be repealed, and if it is not repealed, then Air Canada would consider its next steps concerning the creation of centres of excellence and aircraft maintenance.
On February 17, 2016, Air Canada announced that it had signed a letter of intent to purchase the Bombardier C Series aircraft and maintain these in Quebec and that it would undertake the overhaul maintenance of those aircraft in the province. On the same day, the Minister of Transport announced that he would lessen Air Canada's obligations under the act.
Just imagine the coincidence. On the same day that Air Canada throws a lifeline to Bombardier by signing a letter of intent to purchase C Series aircraft, the Minister of Transport announces his intention to introduce legislation that would directly benefit the carrier by allowing it to get its overhaul maintenance done, legally, outside of Canada. The minister did not even wait a day to make this announcement. It leads me to wonder if the minister would have removed Air Canada's official language obligations if the carrier had made a firm order for 75 C Series aircraft, rather than a letter of intent for 45, as is what has happened.
I would also note that in its latest earnings report, Bombardier announced that it would record an onerous contract provision of approximately $500 million as a special item in the second quarter of 2016 because it is believed to have sold the C Series aircraft to Air Canada and Delta at a loss of $4 million to $5 million per aircraft.
However, I digress.
The Minister of Transport has attempted to justify the legislation by stating, repeatedly, that the governments of Quebec and Manitoba have dropped their lawsuits against Air Canada.
This is simply not true. On two occasions, the governments of Quebec and Manitoba won in court against Air Canada. That is what gave them the power to bring Air Canada to the table to negotiate an acceptable settlement. In the case of Quebec, the reasonable settlement appears to be the purchase of the C Series aircraft and the commitment to undertake that C Series maintenance in Quebec and create a centre of excellence in the province. In the case of Manitoba, the reasonable settlement appears to be the transferring of approximately 150 jobs from around Canada to the provincial capital.
We should be under no illusion that these negotiations are concluded. Air Canada has not even converted its letter of intent for the C Series into a firm order yet. There are no centres of excellence in either Quebec or Manitoba.
On February 10, Air Canada and the Government of Quebec informed the Supreme Court of Canada that an agreement was reached to report the decision on the application for leave to appeal until July 15, 2016. That means that the parties have until July 15 to negotiate a settlement.
If Air Canada is unwilling or unable to fulfill the terms of their agreements concerning the centres of excellence to the satisfaction of the Government of Quebec and the Government of Manitoba, it can be presumed that Air Canada will continue to challenge the Quebec court of appeal's decision in front of the Supreme Court.
It is critical for members to understand that if this law is changed today, then there will be no incentive for Air Canada to remain at the table and negotiate with the governments of Quebec and Manitoba. Both the minister of the economy of Quebec and the deputy premier of Manitoba, who is also her province's attorney general, understand this basic fact. That is why both have asked the federal government to wait until their negotiations with Air Canada are complete before passing the legislation.
Here is the relevant part of a brief from Quebec's Liberal minister of the economy:
...in order to provide for all the aspects of the agreements reached, the Government of Quebec is asking that, once Bill C-10 receives royal assent, the legislation come into force after the final agreements described above have been concluded.
As it is presently drafted, Bill C-10 would come into force immediately upon receiving royal assent.
The deputy premier of Manitoba was equally clear in her appearance in front of the committee. She said:
The federal government's approach to Bill C-10 simply put is jumping the gun. Bill C-10 is being rushed through the process before the necessary specific investments and binding commitments by the federal government and Air Canada have been secured.
There we have it. Two provincial governments have asked the federal government to respect their process and not immediately pass the bill in its current form. However, these reasonable requests have fallen on deaf ears.
This is not the first time the Liberal government has railroaded processes undertaken by local governments that they do not agree with. We all remember that the Minister of Transport's first act was tweeting that he would unilaterally impose his will on Toronto city council by ending any discussion on the future of the Billy Bishop airport. However, once again, I digress.
I presented an amendment in committee last week, the effect of which would ensure that the bill would not come into force until at least August 1, 2016, or two weeks after Air Canada and the attorney general of Quebec inform the Supreme Court on whether they seek to continue litigation or have settled outside of court. The member for Central Nova was the only Liberal who at least attempted to justify why he was voting against such a minor amendment that would have simply fulfilled the requests made by two provincial governments to give them more time to negotiate with Air Canada. My amendment would not have changed the bill, just when it would come into force.
His justification was as follows, “I believe the legislation is sound. If it will be a good idea in August then I believe it's a good idea today”. I like the member for Central Nova. However, as a lawyer, surely he knows that litigation and settlement negotiations take time, while the pace at which the current government is pushing the legislation through can only be described as lightning speed.
Hearings in the Superior Court of Quebec on this matter began on November 19, 2012, over three and a half years ago. The first time parliamentarians heard that the minister planned to amend this act was February 17, 2016, not even three months ago. If it is the member for Central Nova's contention that Parliament's stepping in and effectively siding with Air Canada in this dispute with the legislation, after Quebec and Manitoba were in court fighting for this act to be enforced for three years, is sound public policy, then I guess we know to what the lengths the Liberal Party will go to help out its friends.
Moving on, during the second reading debate on the legislation, my friend from Winnipeg North, who is a frequent commenter in this chamber, asked the member for Beloeil—Chambly if he would “at the very least acknowledge that provinces do matter and that their discussions and their beliefs should be taken into consideration”.
As I have noted earlier in my remarks, the deputy premier of Manitoba explicitly asked for the legislation to be delayed. That is the will of the government from the member for Winnipeg North's home province. I hope that he will consider Deputy Premier Stefanson's comments when he votes on Bill C-10 or makes his next intervention.
Everybody here wants Air Canada to be a viable company that offers safe, reliable and affordable air service to Canadians, while competing against international giants. If the purpose of the legislation is indeed to make Air Canada more competitive, the government has failed to make this case on how it would do so.
In response to a lob from his own member on how Air Canada's maintenance obligations affected its competitiveness, the minister responded, “It is a big, serious question and I do not have the answer”. If it is the government's priority to make Air Canada more competitive with the expectation that Air Canada will be offer lower fares to consumers, there are a number of better options available to it to reach this objective.
For example, the government could tie all airport improvement fees to specific projects with explicit sunset provisions, which would save many travellers more than 20% on their ticket. It could increase the foreign ownership limit of Air Canada, and all Canadian-based air carriers for that matter, to 49%, which would give the carrier access to cheaper capital to finance improvement.
The government could replace the current one-size-fits-all passenger screening approach which treats all passengers equally with an intelligence-driven risk-based passenger screening process. The airport security charge in Canada is $7.12 for domestic travel, so this adds up for frequent travellers.
All of these measures would stimulate Air Canada while maintaining jobs in Canada and would not cost the taxpayer anything. If anything is clear it is that the government has missed an opportunity to truly allow Air Canada to compete against U.S. and international carriers by only bringing forward such a narrow proposal to Parliament.
In conclusion, I remain extremely disappointed that the government is once again imposing its will on local governments that do not share its views, in this case Quebec and Manitoba, by forcing this legislation through Parliament before Air Canada has even converted its C Series letter of intent into a firm order.
If the federal government is actually committed to improving the competitiveness of Air Canada and the entire aerospace sector, it has come up short with this legislation.