Pauline Picard

[Airport Security, March 14th, 2002]

Mr. Speaker, the Minister of Finance plans to impose a tax on air travel starting April 1, to meet the costs of airport security.

Imposition of such a tax will be prejudicial to the airline industry, tourism and economic development in general.

Under the circumstances, is the Minister of Finance going to come to his senses, abolish the tax on air travel, and finance the cost of security measures from the government's consolidated fund?

[Budget Implementation Act, 2001, March 13th, 2002]

Mr. Speaker, in the wake of September 11, the Minister of Finance brought down in December his budget entitled “Securing Progress in an Uncertain World”.

Now, as then, the minister has not succeeded in convincing anyone of the merits of his budget, which many criticized then, and are still criticizing today. The government was going to make security its top priority and relegate its health funding obligations to second place.

During the prebudget consultations, the Standing Committee on Finance, of which I am a member, heard from many witnesses, here on the Hill, and during cross country meetings. Many people recommended that the federal government give the economy a boost. Instead, the Minister of finance was satisfied with a budget just for the sake of form, without any measures to revive the economy and reverse the slowdown.

This budget boils down to a series of spending programs, the main purpose of which was to reassure the Americans. It contained very few measures to ensure the economic security of our citizens. The budget contained nothing new for health, the government merely reiterating old announcements, and nothing, of course, about equalization.

Sticking with the approach it has taken since 1994, the federal government decided to leave the provinces to find their way out of their financial difficulties. The Minister of Finance preferred to turn a deaf ear to the requests for assistance he received.

I also wish to speak about part 1 of the budget, which deals with air transport security. Having turned over responsibility for airport security to the airlines, the government has decided to take back control by establishing the Canadian Air Transport Security Authority. The agency's mandate is to provide key air transport security services in a uniform and comprehensive manner throughout the country, and to provide performance standards and improved security services.

Just days away from the introduction of this new federal agency, air industry officials note that its mandate is not clearly defined. It has the mandate to screen persons and their belongings at airport screening points. But what about the people working in proximity to airplanes: mechanics, baggage handlers and others? The Canadian Air Line Pilots Association has not hesitated to criticize the oversights noted.

Does the Minister of Transport intend to hand over other responsibilities to this new agency? If so, why not have spelled them out?

In connection with the training of security personnel, creation of the Canadian Air Transport Security Authority suggested improved quality. The general principles call for staff less subject to turnover, and equipped with the appropriate skills and equipment. Now we learn that this federal agency can contract out airport security to the companies already providing it. Will this bring any new and real improvements?

Passengers are already undergoing longer and more stringent controls before takeoff, yet their baggage is being loaded onto planes without a proper inspection.

The act contains transitional provisions to ensure a smooth transition from the old regime to the new. The minister has, however, taken care not to indicate exactly when these new measures and new equipment will be in place.

The government has not succeeded in convincing us of the utility of creating a new authority to provide security services. This is, in fact, just one more structure and one more expense.

What more is this new agency going to do to provide security that is not already being done in our airports? What is this highly professional service the Minister of Transport is promising?

The second part refers to the security charge. According to the announcement, the creation of the Canadian Air Transport Security Authority will cost $2.2 billion. One cannot oppose a good thing, of course. Improving security is a laudable objective in itself. The bad news for air travellers is—and this is the rub—they are the ones who will be paying for the measures put in place.

Many feel that security is a national issue. What then are we to make of the decision this government has made to make air travellers pay? Why not extend this to all taxpayers? Is travel by ship, rail or road any less risky?

The Minister of Finance's decision is unfair and certainly will not help the tourism and airline industries get back on their feet again after the events of September 11. In addition, already in the first year of this new tax being implemented, there is a surplus of approximately $223 million being forecast. The tax then will be bringing in more money than needed. Perhaps the Minister of Finance is not aware that this is called a surplus, that it can be forecasted, that it matters and that it comes out of the pockets of taxpayers.

The Liberals would like everyone to think that they are a good government that is ensuring everyone's security. However, it is travellers who are footing the bill. Not only must they pay for the cost of these new anti-terrorism measures, such as the presence of police onboard aircraft, but they will also pay for passenger screening, something that used to be done by airlines and airport authorities.

This September 11 tax is regressive and does not amount to any savings, particularly since it is added to the list of fees that are paid when purchasing a plane ticket. It is in addition to the fuel surcharge, airport improvement fees, the GST and other security charges that are paid out. Now, on a ticket that costs $800 with Air Canada, or $150 with WestJet, consumers will have to pay a $24 fee for a return trip, while the American government is charging a maximum fee of $10. This suggests that security is more expensive on our side of the border.

If the mandate given to the new security authority is similar to that of Nav Canada, how can the government justify a new structure? Why should we pay more when the airlines were providing the service for $72 million?

Does the Minister of Finance believe that this tax grab of $2.2 billion from travellers' pockets over five years will improve the situation of this industry that has been badly shaken since September 11? Is he not aware that there have been significant financial losses suffered by travel agencies and others, to the tune of more than $20 million, and that he has done nothing to respond to demands from the Tourism Industry Association of Canada and airlines, for compensation for the losses incurred when airspace was shut down?

Do our constituents not have the right to expect adequate security? From that perspective, these measures should have been implemented a long time ago. The commitment to improve aviation safety made in the 2001 budget will be financed through this new airport security tax that will take effect on April 1. It is not an additional cost to the government. Travellers are going to be paying for that. As surprising as it may seem, the government is going ahead with this initiative without first assessing the impact of this new tax.

The government does not yet know what the economic impact of this new measure could be. It is an aberration.

The Minister of Finance and the secretary of State have both been telling anyone willing to listen that the introduction of this tax would have hardly any impact; we even heard them say it would have no impact on demand in the air travel industry, regional development and tourism. On what basis did they make such statements? There was no basis. These were totally unjustified. Does the government realize how serious this is? Since when do responsible politicians manage by instinct?

We asked that all impact studies related to the introduction of this new tax be tabled, but to no avail. The minister's officials remained silent. The Minister of Finance told us on several occasions that he had to act quickly. It was our American neighbours who were targeted in the unprecedented events that occurred on September 11.

With this kind of approach, the government is giving us the impression that it neglected our own security.

The Liberal government is invoking the urgency of the situation, but the evidence heard by the powerful Standing Committee on Finance should not be ignored. Witnesses from all sectors of the economy told members that this new tax will have devastating effects. Airline carriers fear that it will result in fewer people flying. Why did the government not conduct studies? What good would be the hours spent in committee if the government turns a deaf ear to our recommendations? By acting in this fashion, the federal government is being irresponsible.

The government, which has a duty to ensure national security, could have fully funded the improvement of security on board aircraft and at airports, with the budget surpluses that it has, without imposing another tax on users.

Instead, the government smelled an opportunity. A sniffer dog would certainly think that it stinks. But the minister is going ahead anyway. The Minister of Finance will become the minister of surpluses, and his security tax is just one more tool in his hands.

Somebody once said “Why have teeth so white when your tongue is so dirty?” Why is the Minister of Finance promising to review the relevancy of this tax in the fall, when his party got elected on the promise to abolish the GST?

The government is in such a hurry to tax travellers that it has not yet put everything in place to ensure the smooth implementation of that tax. It is surprising to read that, with less than 19 days left, the travel industry is still wondering how to accurately measure the impact on airfares. There are still doubts as to whether that tax may be imposed on stopovers and connections.

Airlines must prepare for major changes to their computer systems. Will these changes be completed on time? And has the minister included a grace period, in case mistakes are made in collecting the tax?

The stakeholders whom we met suggested that, while the tax seems easy to understand—$12 for a one way trip and $24 for a return trip—calculating it may be complicated. The definition of a continuous trip is not clear and suggests that a traveller could sometimes be taxed twice when he makes a stopover or catches a connecting flight.

The vice-president of the Air Transport Association of Canada feels that the number of hours that a stopover can last without imposing a new security tax on the second leg of a trip is ambiguous.

What will the government do in the case of clients who believe they have paid too much for security on their tickets? To whom do they file a complaint? The agency that issued the ticket, the airline or directly with the Canada Customs and Revenue Agency? These are questions that have yet to be answered.

The government ministers are not acting on this issue with the same sense of urgency. The Minister of Finance sets a tax, in a rush to take action, he says, because of events. His colleague over at Transport however, is unable to say exactly when the new measures will be implemented and the new equipment will be in place.

Our neighbours to the south say that all baggage will be screened for explosives before the year is out. In Canada, the Minister of Transport raises his eyebrows at the Americans' assertions and admits that it will take us between three and five years to get there.

The government announced that it would spend $1 billion to purchase explosive detection systems, provided such equipment is available. As I have already said in the House, there are only two companies in the entire world that manufacture this equipment, and they cannot keep up with the demand.

After the explosion of the Air India flight at the Toronto airport, we implemented a system whereby baggage was matched with the passenger list. The purpose was simple: preventing baggage from traveling without its owner. Many airlines found the idea to be a good one and implemented it. However, this system does not eliminate the possibility of a suicidal passenger being on board.

In the new security measures it announced, the government decided to put undercover police officers on board aircraft. While the cabinet is unanimous that this should occur, union representatives of both pilots and flight attendants have yet to see them. The only times that these constables have been seen was on flights to Reagan airport in Washington.

The government has yet to set up its software to screen passengers that may represent a threat to security. The software should be able to do this by reading the passenger list. The plodding pace of progress on this is causing concern among airlines that travel to the United States.

We know that no system is failsafe, but a good knowledge of the identity of passengers, combined with explosives detection and stricter security screening measures at boarding can improve our security.

Not only do we need to wait for these mechanisms to be put in place, but as well the government needs to demand more of the RCMP and CSIS.

It is particularly disturbing to see this Liberal government putting its hands on $2.2 billion over five years without being in a position to provide us with a detailed breakdown of the costs that make up this amount.

Are we going to be witness to another misappropriation of funds, like what this Liberal government has done with the EI fund? We are not the only ones to doubt the government; the Canadian Taxpayers Association finds that there is something a bit fishy about this. The associations representing travel agents and the tourist industry are opposed to this tax. The Bloc Quebecois is opposed to the imposition of this tax, imposed willy-nilly as it is. Our colleagues in the other opposition parties also agree with us on this.

The Canadian tourism industry, ACTA, describes this tax as punitive and feels it will have serious impacts on their industry. A poll by Ekos, a firm known to those across the way, which was commissioned by the CAA, produced some food for thought. It reports that 16% of people who currently travel by air have said that they will travel less once the tax is in place.

Is this what the secretary of state calls minimal impact?

Even the representatives of WestJet told the Standing Committee on Finance that this new security charge will have a negative impact if it is imposed regressively, as is the plan at present. Why? Because this approach means that the amount paid is a higher percentage of the cost of short flights, and this will be counterproductive, stopping new competitors from entering the market. We must not forget that Air Canada has a virtual monopoly.

By maintaining its decision to impose this tax, the government is acting in a remarkably cavalier way.

We are afraid that smaller communities will no longer have air service, because it is not cost effective. A number of regional airports have already been dropped by the major carriers in recent weeks.

The people of New Brunswick can attest to that. The Charlo airport has never recovered from the disappearance of InterCanadien when Canadian merged with Air Canada. In January 2001, Air Labrador also packed it in, so this airport no longer has any regularly scheduled flights.

Most fortunately, a new airline, Baie Chaleur Air, will soon be plying the skies over Montreal and Toronto. Baie Chaleur Air will be offering service to the peripheral regions of Quebec and Canada, regions that are experiencing difficulty maintaining air service.

Will the impact of Bill C-49 undo the efforts of areas such as the Gaspé, Lac-Saint-Jean and the North Shore, to name just a few, which have been fighting for years to find a viable solution to the monopoly of Air Nova, Air Canada's regional service in Quebec.

The number of questions which remain unanswered show just how imperative it is that there be studies of the impact of this tax on air fares. Candidly admitting that none were requested shows an unacceptable lack of concern.

Part 3 of the budget deals with employment insurance. As we have been telling people for years, the Minister of Finance is helping himself to the surplus in the EI fund in order to pay for the measures in his budget.

The Bloc Quebecois has repeatedly said that this diversion of funds must stop, and the Canadian Taxpayers Federation supports our position. My colleague from the Lower St. Lawrence can attest to this, as he has been denouncing what can practically be described as the theft from the EI fund since we have been here, in other words since 1993-94.

We were expecting reductions in EI premiums, as were workers and employers.

True to form, the government is using the surplus in the fund to improve its financial situation.

This budget contains nothing for workers, and SMBs are fed up with paying more than necessary for the EI fund.

Instead of getting the message, the government conceals from us the report of the actuary for Human Resources Development Canada, a report that would show us the real needs of the fund so that premiums could be set accordingly. That is what clarity means to this Liberal government.

Part 6 of the budget deals with the Canada strategic infrastructure fund. Another aspect of this bill particularly caught our attention: the decision to invest $2 billion in this fund, with part of it to be available for fiscal year 2001-02. We are a few days away from the end of the year and all signs are that the fund is empty.

I am dismayed. The Minister of Finance said in his budget, and I quote:

This budget commits a minimum federal contribution of $2 billion...with an initial allocation from this year's surplus funds at year-end.

More recently still, on February 5, the backgrounder put out when the bill implementing the 2001 budgetary initiatives was introduced says:

In the 2001 budget, the government announced that it would provide at least $2 billion for major infrastructure projects. These goals and this $2 billion initiative, as set out in the budget, are those of the Canada Strategic Infrastructure Fund

My hon. colleague from Jonquière who has a special interest in regional development and the implementation of infrastructure projects, has tried several times in this House to get information concerning this fund and to find out when the money will be made available.

Time is running out and the government must act quickly if it intends to use the surplus from the current fiscal year, since March 31 is the deadline. What makes it even more troublesome is that no amount appeared for the Strategic Infrastructure Fund in the Supplementary Estimates tabled on February 28, 2002.

Need I remind the House that Bill C-49 has yet to be passed and that the infrastructure fund has not been officially established yet? Therefore, the money that was announced cannot be made available. Once Bill C-49 is passed, we will need another bill to allocate part of the surplus to the fund.

Given the situation, how could the Deputy Prime Minister maintain, in an interview he gave on March 6, that this $2 billion fund is a good start?

The Deputy Prime Minister then added that the launch of this program would probably be postponed until next autumn and that the eligibility criteria would be submitted to cabinet somewhere around April or May.

This total lack of planning makes the government look pretty bad.

I am curious to hear how Liberal members will explain the fact that all the highway construction projects that they promised are now at risk because of a lack of funds.

Voters should know that this government is incapable of fulfilling its commitments. Back home, this is called lying through one's teeth.

It may be that members opposite have a rabbit hidden in their hat. They should bring it out soon. But we all know that the Liberals, and particularly their leader, do not really take seriously the promises they made during the last election campaign.

If these election promises were fulfilled, it would force the government to come up with $1.9 billion, that is 50% of the money needed to complete the projects that they pledged to do, and 80% of the funding that is necessary for highway 185. The Liberals promised a federal contribution of $1.1 billion for highways 175, 185 and 30. Currently, there is only $108 million available, over a four year period, for these projects.

Where is the money that should come from the Canadian strategic infrastructure fund for this year? What is the basis of the comment made by the member for Beauharnois—Salaberry during the election campaign, to the effect that the bridges on highway 30 were a done deal?

In conclusion, the federal government has been achieving significant surpluses since the mid-nineties. Since 1997-98, federal budgets have always generated surpluses ranging from $2.9 billion to $17.1 billion in 2000-2001.

The conference board itself feels that the current positive gap between federal revenues and expenditures will continue in the future and will even increase, because the debt is going to be paid off with the employment insurance surpluses, with the new tax on security and with the unpaid benefits to seniors under the guaranteed income supplement program.

From the time he delivered his budget until the time he introduced this bill to implement it, the minister has missed the boat.

This government does only as it pleases. It did not take into account the work of parliamentarians and the needs expressed by the witnesses who appeared before the Standing Committee on Finance.

The government keeps governing by acting unilaterally to ensure that it enjoys surpluses.

The provinces, the workers, the employers and the unemployed all told this government what they expected from it. The government replied by tipping the scale in its favour and by ignoring the needs of these people. The government let them down, as it always does when there is a consensus.

Sovereignty is the only option for Quebecers who want to get out of a system that stifles them.

[Budget Implementation Act, 2001, March 11th, 2002]

Mr. Speaker, although we agree with the proposed amendments, I would like to take advantage of the time allocated to me to once again speak out against the harmful effects implementation of the new security tax will have on the airline and tourist industries.

Effective April 1, 2002, a new tax will be imposed on the users of air travel. This tax, a set fee of $24 for a round trip, will impact on the industry. When we asked the Minister of Finance to provide us with the impact studies done on this, he admitted candidly that there had been none commissioned. This is unimaginable.

Security is, above all, a national issue. The victims of the September 11 attacks, which brought down the World Trade Center towers, were not all on board the planes. A large number of them were at work in their offices. It is possible to imagine that a cargo plane could have had the same impact.

The government seems in a rush to impose its tax. The Air Transport Association of Canada, which represents the major airlines, travel agencies, airports and reservation systems, has asked for time to study the new tax. The association's request is based on the need to carefully assess the repercussions it will have on ticket prices. It seems the problem lies with stopovers and transfers.

It seems that the airline people have discovered that calculation of the charge might lead to higher ticket prices, because it is so complicated, not to mention the fact that it is not clear how much time will be allowed for a stopover. Some travellers might end up being taxed twice if they were more than a few hours between planes.

There is also the request for a grace period. Inevitably, charging the new tax will result in some mistakes. Will the government give a positive response to any requests made to it?

As the government sets up this new security agency, to be funded by this new tax, its mandate is not yet clearly defined. We know that it will look after passenger safety, among other things, but what other responsibilities does the Minister of Transport plan to give it?

This morning the secretary of state reiterated that urgent action is needed in the aftermath of September 11. Yes, people's safety must be assured, but not willy-nilly.

May I remind the secretary of state that the last act of terrorism involving an aircraft in Canada occurred in 1985 when an Air India aircraft exploded in Toronto, killing 329 people? The bomb was hidden in a suitcase stowed in the baggage compartment. Yet, to this day, it appears that airlines are still not required to conduct security checks on all the baggage that they carry. Every day, baggage is put on board aircraft without adequate inspection.

Sure, people who fly have noticed a number of changes at departure points. But what about what goes on behind the ticket counter, or on in the baggage conveyor area? The Airline Pilots Association is condemning the lack of adequate security measures in certain areas at airports. The only noticeable and visible changes are with crew members, who are implementing stricter control measures.

In its December budget, the government allocated $1 billion to buy a bomb detection system. The problem is that this system, which costs $1.6 billion, is only made by two companies in the world and they cannot keep up with demand. When will we have these systems in our airports? And how long will it take for all the security measures and necessary equipment to be in place and fully operational?

Let us now look at the financial impact of this tax. The secretary of state should tell us how he calculated his tax. Just last week, the Toronto Star wrote that the new tax on airport security would bring in $130 million more than necessary. By the year 2006, the surplus generated would reach $250 million.

What we know right now is that this government plans to collect $2.2 billion dollars over the next five years. It has a duty to tell us exactly how this money will be spent for our security.

A rapid calculation makes it clear that surpluses can be expected. I know that the Minister of finance is not very good at calculating surpluses: I understand that he is incapable of forecasting one.

We estimate a surplus of approximately $223 million in the first year that the new tax takes effect. Will the government siphon this off, as has become its sorry practice? Is the government telling us that it plans to help itself to the surplus from this tax, as it has done in the case of employment insurance?

Although the government likes to say that this new tax will be used to pay for new security measures in airports and that it will have little or minimal impact, it is unable to provide convincing evidence. Where are the impact studies related to the introduction of this new tax?

We cannot let go by without comment another rather disturbing point, that being the establishment of the federal security authority. Prior to September 11, the provision of security services in airports was contracted out to private companies. We had no special requirements with respect to the hiring of employees.

The establishment of a federal authority held out the possibility of better trained, and certainly better paid, employees. Now we learn that the authority is authorized to award contracts to the same companies now working for the airlines. It is true that the companies will have to meet Transport Canada's requirements, but we do not know what these new standards will be.

In conclusion, much remains to be done. I do not understand why the government wants to move so quickly.

The Minister of Finance said in the House that he would review the application of his tax in the fall. This statement leaves me very confused. This is the same government that got itself elected by promising to eliminate the goods and services tax, the GST. The election took place and the tax remained. Once the tax is in place, the odds are good that it will remain.

Why make Quebecers and Canadians pay a $24 tax, when our American neighbours are paying only $10?

This tax is in addition to the GST on some flights, to the fuel tax charge, to security fees, to charges for air navigation and to airport improvement fees. As a result, once the new tax is applied, the price of a ticket for a flight from Edmonton to Calgary will go from $100 before September 11, to $180 after April 1, 2002.

What would happen if travellers gave up on air travel because the costs were too high? Airlines would abandon certain less profitable flights, and it would be the small communities that would pay the price.

What would be the economic consequences? What would be the consequences for development in the regions, in particular the remote regions? Quebecers and people in the other provinces will have to shell out and take it. This is not the first time the Liberals have racked up a surplus, and this tax, without any thought to its consequences, will only further inflate the government's surplus.

We are warning this government: it must hear our appeals and review its position. It has the responsibility to carry out economic impact studies and present us with their findings, now, while there is still time, rather than promising a review once the damage has already been done.

[Taxation, March 11th, 2002]

Mr. Speaker, given public opinion, the minister will not be able to hold this position much longer.

Does he not understand that it is unacceptable for him to collect too much of taxpayers' money when it is the provinces that are bearing the rising costs of health and education?

[Taxation, March 11th, 2002]

Mr. Speaker, this year's surplus figures, like those from previous years, demonstrate eloquently how the federal government is collecting too much money for its responsibilities, whereas the provincial governments, which are responsible for dealing with the challenges presented by health care and education, do not have access to a large enough tax field.

Will the Minister of Finance confirm whether or not he intends to put the issue of the fiscal imbalance on the agenda at the next conference of finance ministers, in April?

[Airline Industry, February 27th, 2002]

Mr. Speaker, what are we to make of the comments of the Minister of Finance, who told us confidently that his tax on air transportation would have no negative impact, when they were not based on anything, and on no serious measure?

Is the Minister of Finance not really just bluffing with this sort of behaviour?

[Airline Industry, February 27th, 2002]

Mr. Speaker, in the last federal budget, the Minister of Finance announced a new $2.2 billion tax to improve airport security.

Yesterday, officials stated that no sectoral or regional impact studies had been done prior to this tax being imposed. What is more, stakeholders are unanimously opposed to this tax, which is devastating for airlines, the tourism industry and the future of the regions.

Given the difficulties that airlines are experiencing, particularly in the regions, how is it that the Minister of Finance could go ahead and blindly impose a tax without assessing its impact beforehand?

[Armotec, February 26th, 2002]

Mr. Speaker, I am always pleased to talk about the successes of Quebec businesses, especially those in my riding.

Recently, Armotec, a Drummondville company, was named Quebec's top exporting SMB by the National Bank.

Armotec manufactures hardware for kitchen cabinets and office furniture. It offers 3,089 permutations of the Lazy Susan. Founded in 1980, it employs a staff of 60. Over 60% of its total sales are made outside Canada.

Last year, shareholders François Beaudoin and Guy Rousseau doubled the company's floor area, the eighth expansion in Armotec's history.

Thanks to research and development of new products and top-notch personnel, this SMB has tripled its sales since 1996. This is another example of Quebec's strong entrepreneurship.

Congratulations to Armotec on 22 years of success.

[Highway Infrastructures, February 25th, 2002]

Mr. Speaker, if, after March 31, the government wants to allocate part of the year end surpluses to something other than the debt, it must pass a bill, otherwise it will be too late.

Does the Deputy Prime Minister intend to introduce a bill to recover part of the surpluses and allocate them to the highway infrastructure program, so as to fulfill the Liberal promises made during the election campaign?

[Human Cloning, February 21st, 2002]

Mr. Speaker, people continue ask the government to regulate genetic research and ban human cloning. By not developing adequate policies on these issues, Canada is lagging behind other countries in this area.

Indeed, France, the United Kingdom, Denmark and Australia already have policies to regulate this fast evolving research area.

Let us not forget that there is a lot of money to be made by patenting cloning processes or specific types of stem cells.

Researchers and scientists agree that cloning techniques are still not refined enough to get into human cloning. The risk is too great. We must quickly ban reproductive cloning, to prevent apprentice cloners from doing the irreparable.

I urge the Minister of Health to introduce a bill as quickly as possible. It is urgent that we take action.