Roy Cullen

[Budget Surplus, November 5th, 1999]

Mr. Speaker, it is incredible that the Bloc Quebecois is talking about news like that, when new jobs were created in Quebec in the month of October.

There were 33,000 new jobs in October in the province of Quebec.

If we want to talk about transfers, let us talk about the $1.8 billion additionally for Quebec via the CHST, $2.7 billion in the additional CHST transfers, $750 million a year in tax point increases and $2.8 billion in additional equalization payments.

[Taxation, November 5th, 1999]

Mr. Speaker, just last week the finance minister prepared the economic and fiscal update projecting surpluses over the next five years. In terms of corporate taxes he has asked the public to comment on what we should be doing with business taxes.

In terms of taxes on small businesses, Canada has the lowest taxes on small businesses in the G-7.

[Soheil Mosun Limited, November 5th, 1999]

Mr. Speaker, many companies strive to be world class players in their industry, many companies strive to be excellent.

Let me today acknowledge a company for which these are not just distant goals, a company for which these ideals are part of everyday reality. Let me today introduce Soheil Mosun Limited, a custom architectural fabrication firm that I am proud to say is located in my riding of Etobicoke North.

Recently its excellence was again recognized when it was granted a contract worth $7 million to participate in the refurbishment of the Renaissance Centre in Detroit. This project to upgrade GM's headquarters is touted as the world's largest renovation project. I am glad to see that a Canadian company and Canadian employees will be participating.

Many thanks also to Canada's crown corporations, the Canadian Commercial Corporation and the Business Development Corporation, for their assistance in bringing this transaction to fruition.

I welcome Soheil, Darius and Cyrus Mosun. Congratulations to Soheil Mosun Limited.

[Youth Criminal Justice Act, October 29th, 1999]

Mr. Speaker, Canada's crime rate has decreased for seven consecutive years. In 1998 the crime rate was 22% lower than in 1991 and the lowest it has been in 20 years. This decrease is reflected in all major categories of violent and property crimes.

This is great news for Canadians and it confirms the fact that Canadians are safer in their homes and on the streets today.

The reason I stand to remind the House of these statistics is to counter the impression that the official opposition consistently tries to spread across this land, a view that would frighten Canadians, a view that they hope will improve their declining political fortunes.

The facts speak for themselves and Canadians will not be fooled. Our government will continue to work vigorously to prevent crime. The youth criminal justice act will enhance accountability in our system and ensure that youth who violently and repeatedly break the law will be dealt with.

I would like to thank our Liberal government for its hard work to ensure the safety of all Canadians.

[Supply, October 28th, 1999]

Mr. Speaker, I will answer on two fronts. First of all, the member is in error. As many Canadians are doing, he is mixing up the 10% ownership rule with the foreign ownership rule.

The 10% rule means that for Air Canada, not Canadian Airlines, no single person or body can own more than 10% of Air Canada. That was implemented when Air Canada was privatized. The foreign ownership rule is the 25% rule.

When the Onex proposal came forward it was in the form of a proposition. Clearly, if the government at that point in time had a policy decision that it was not going to contemplate increasing the 10% rule, the government would have said so. Onex would not have proceeded up to this point if it did not feel the government was open to that discussion.

I find it amazing that Air Canada would be so dogmatic about the 10% rule. I think it is somewhat self-serving. If Air Canada came forward with a proposal which violated the 10% rule, my take on that would be that it would be saying that it does not meet the requirements of the law of the land now, but it would respectfully submit that there is a proposal on the floor which now exceeds the rule and it would like its proposal to be considered as well.

We are legislators. When people talk to us they ask us to legislate. Why is it so impossible for someone to say that we should reconsider the 10% rule?

At times, when it is convenient, people hide behind these rules. No one has actually increased the 10%. No one has done that. No one has violated the law of the land. Someone has come forward and said that perhaps we should reconsider. Frankly, if Air Canada had done the same I do not know how our government could possibly have said “You cannot do that”, because we did not say that to Onex.

I am fully confident that if Air Canada had come forward with that proposition we would have had the same kind of policy framework that has been articulated more recently by the minister.

Are we playing games or are we interested in solutions? Let us try to work on this.

[Supply, October 28th, 1999]

Mr. Speaker, as I said in my remarks, when Air Canada was privatized the decision was made to limit single shareholders to 10%. That was done so that the shares would be widely distributed across Canada. I was not there at the time, but it was probably a sensible policy decision. My colleague was there and he agrees with me. The irony is that there is no such requirement for Canadian Airlines.

Foreign ownership is another interesting twist. In the Onex proposal, American Airlines would actually own less of Canadian Airlines than it owns today. I think it owns about 34% or 35% today. That would come down to about 15%. How can we apply one standard for Air Canada and another for Canadian Airlines?

The policy objective of widely distributing participation in Air Canada has been met. Why do we perpetuate this? It is a good debating point, but to me it does not make any sense to close down the option until we have had a discussion about it. Frankly, I do not see the public policy objective.

The unfortunate thing is that when Canadian Airlines was in severe financial difficulty American Airlines came in, put a lot of money into Canadian and sewed up a lot of agreements which, in the final analysis, as a business proposition, was probably the thing that had to be done. However, at the end of the day, Canadian has been strapped with some agreements which have really hampered it.

I am not very happy with the extent of control American Airlines might have over Canadian the way it is structured now. However, I gather that Onex has come forward this afternoon with a new proposal and I will read it with interest.

[Supply, October 28th, 1999]

Mr. Speaker, my apologies. The role of government is to set a policy framework against which proposals will be weighed.

As far as foreign ownership, as I said before the sole perspective of the Competition Bureau is competition in Canada. I wish the Competition Bureau would be as rigorous on this as it is about gasoline pricing. I have certainly been involved in that discussion. It does not have to look at the question of whether it is Canadian controlled. That is a serious issue for Canadians. I would have problems going above 25%. From a strictly economic point of view one could argue that it might be more efficient.

As policymakers we have to look at things other than economic efficiency. In fairness to the Competition Bureau that is its mandate, but as legislators we have to look at it more broadly.

[Supply, October 28th, 1999]

Mr. Speaker, the member opposite is a member of the Reform Party. Is it not your philosophy to let the market decide? Suddenly the government has to decide what—

[Supply, October 28th, 1999]

Madam Speaker, I am pleased to enter the debate on the restructuring of Canada's airline industry, not necessarily to speak to the Bloc's motion. Usually when the Bloc brings something to the House it is a sort of myopic view of public policy. Here coincidentally, Air Canada's head office is in Montreal, Quebec and Air Canada does not want to see any change to the 10% rule. Therefore the Bloc has come in here supporting no change to the 10% rule.

I would like to speak on the key issues here, which are the amount of Canadian ownership and control in any industry in Canada and the question of competition and service.

The 10% rule should be put in context. When Air Canada was privatized however many years ago that was, the policy intent was to ensure that the shareholdings were broadly held across Canada. The government brought in a 10% rule to ensure the shares were widely held.

The question now before the government is whether the 10% rule should be relaxed. It makes eminent good sense to have a look at that. That is all our government has said, that we should not rule out any options, that we should have a look at the 10% rule.

The 10% rule does not apply to Canadian Airlines. What is the magic of this 10% ownership rule? It has to do with how widely the shares are held. It has nothing to do with foreign ownership.

To argue, actually to cheat, to say that we should not bring any policies forward that do not comply with legislation, the next time Air Canada or any interest group phones me and says that we need to change these policies or legislation, I will tell them that I am sorry because the legislation is here and that is what we are working on, so we will not consider any proposals. That is what I would do.

Our role is to legislate. We have a proposal in front of us which someone has asked us to look at. We must debate it. It is a good debate. Our government has said that parliamentarians are going to debate it.

I will certainly be voting against the Bloc motion. In a public policy sense it does not make any sense. Why would we close down that door at this point in time?

I would like to address the other hypocrisy I have seen in this debate. On the one hand the Reform Party says let the market decide, that the market should control these things, that it should determine what the best mix of air service and air structure is in Canada. Then the minute the government lays down some public policy principles, the Reform Party says that the government is interfering. The minute the government says that we should really look at the 10% rule, the Reform Party says we are creating favouritism. In fact we are creating favouritism the other way if we do not open that door because Canadian Airlines is not governed by the same 10% rule, not at all. We need to get serious in this debate.

In terms of the government's role, we came out with a set of five principles. To my mind that was what we needed to do, had to do and it is what we did. We said that rather than nickel and dime every single proposal or alternative that is out there, we are going to set a framework. The government has embellished that somewhat since the first five principles were set out. No matter what proposal we look at, the government should weigh it against these five public policy objectives. That is what our government did.

I would like to reiterate those five policy principles. The government said that no matter what proposal comes forward, and by the way, we do not have any firm proposal right now because nothing has been approved by any shareholders. Once a proposal is approved, we will evaluate that proposal against these criteria: Do we have Canadian control and ownership? Will we have good competition and service to consumers? Will we have good pricing in Canada? Will we be able to serve small communities? What about the rights of employees? Will they be protected as best as they can?

Of course safety underlines everything. That is the mission of Transport Canada. That is its number one objective. Safety is a concern in the context of any proposal that would come forward.

Our government laid out the five principles. In fact, when the government relaxed section 47 of the Competition Act, I thought, naively perhaps, that maybe the airlines would start talking to each other.

In fact, the government's policy purpose may have been to have Canadian and Air Canada talk to each other to try to rationalize some of this excess capacity out of the system. It is no secret. People in Canada recognize that when there are two flights at the same time from Toronto to Calgary, one Canadian and one Air Canada, at 7 p.m., 8 p.m., 9 p.m, and 10 a.m. It is called wing tip to wing tip flying on the same routes. We cannot have the luxury of that kind of excess capacity.

Some pilots will say that the planes are sort of full. Probably they are, but at what price? We know the way the pricing is done these days. There are about 60 different prices. About 80% of the people sitting in that plane are covering the variable costs maybe, but that is about it. Airlines cannot survive that way, Canadian or Air Canada.

We know Canadian Airlines is in deeper trouble, but Air Canada really has not performed that well over the last 10 years either. We have excess capacity and we have to deal with it. We cannot hide. We cannot run. We have to deal with it.

Canadian ownership is an issue that is important to all Canadians. Frankly, I do not think we should compromise on the 25% rule at all.

In terms of the proposals we have in front of us, at least in terms of propositions, the question becomes how do they stand against that test? There has been a lot of misinformation about that in my view.

The Onex proposal is really proposing that American Airlines would have about 15% of Canadian. In fact, its shareholding goes down. In terms of its equity participation I think it is one member of the board of directors, or two out of thirteen, something in that order. We know that is not effective control.

The Canadian Transportation Agency will rigorously look at any proposal that comes forward. It will deal with the question, is it effective Canadian control?

The ringer, the hook, is in all the side agreements. There are side agreements with American Airlines and Canadian. We know about the reservation systems, maintenance.

The Canadian Transportation Agency will look at any proposals. It will study them and come back to the government and say that it has looked at them in some detail. The agency will say that it has looked at every single agreement that Canadian Airlines has with American Airlines and that from a policy perspective it is either effectively controlled in Canada or it is not. However, it is a valid public debate to have notwithstanding that we do not have all those facts in front of us.

Another aspect is the Competition Bureau. Its criteria is what does it do to competition. It does not have to worry about effective control or Canadian control. It just has to answer the question what is in the best interest of competition.

That is a very valid question but the bureau does not have to worry. If we look at cabotage, it means that we would open up our doors and allow foreign airlines to come in, pick up passengers in Toronto and take them to Calgary. It could be American Airlines, United or whatever. The bottom line in my view is that with the economies of scale of some of the huge American airlines our airline or airlines would be hard pressed to compete.

Why would we allow cabotage in Canada without getting the reverse, for example, in the United States? That would be folly. I do not think the Americans are prepared to allow cabotage in the United States. That to me is not an option.

The Competition Bureau clearly has a role to play. We are essentially looking at a one airline policy in Canada. Anyone who thinks that we cannot do anything about that is not really thinking through the facts. As a government we have a lot of options.

We could look at reregulating the industry. It is not an option that I would support, but we could do that in some limited way. I am very concerned about service to remote areas of Canada and some areas that might be marginal.

However, if we give an airline a chance to rationalize some of that capacity, instead of 12 flights a day into certain centres by Air Canada and 12 by Canadian Airlines almost at the same time maybe we would end up with 8 in those centres but we would have service to other areas on a much more frequent basis.

How do we structure that? We cannot structure it on the basis of hope. We have to put some policy meat on those bones. Our government through debates and discussions with all parliamentarians should consider that.

I do not like either of the deals that have been proposed the way they stand right now. I understand that Onex has come back with something today. It is trying to limit the perception of American Airlines effective control, but until we see all the side deals I do not know if we can really deal with that.

I am glad these companies are at least thinking of how they can try to meet the public policy objectives of the government. I looked at the Air Canada proposal. In my mind I saw one proposal that was a heavy, dominant American Airlines proposal and another one with Lufthansa and United. It was sort of like pick our poison. We have some work to do.

I would have liked to have seen one airline do the major financing in Canada. I am not convinced that it cannot be done. Why can it not be financed in Canada?

I am not sure that the Air Canada proposal deals effectively with excess capacity. They are going to run Air Canada. They are going to run Canadian Airlines as a separate entity. They are going to throw in a computer discount airline into Hamilton. What does that do to our capacity? By the same token, unless the new Onex deal has some interesting propositions with respect to American Airlines effective control I think that proposal is problematic.

I remember being at the transport committee one day when we were looking at the competitiveness of the air transportation sector. I asked a pilot group or some group about code sharing on domestic routes. All the airlines do code sharing internationally. Instead of having both a Canadian Airlines and an Air Canada flight leaving Toronto at 7 p.m. to go to Calgary, why would they not code share that?

Naively I thought when the government relaxed section 47 that the airlines would talk. All they have done is gone off their own separate ways and now we are into mergers. Maybe a merger is the only solution. The airlines say it is.

I was hoping that while they had this opportunity they could actually talk about rationalizing some of the excess capacity. On the notion of cherry-picking routes, Air Canada proposed to Canadian Airlines that it would take its international routes. That is where Canadian Airlines makes its money. Is that really working toward a solution?

The airlines have to get serious about dealing with this issue. I would like to see a little more creativity and imagination because at the end of the day we will have some very tough policy questions in the House. I am not sure that we are getting much closer. I really hope that we can.

Air Canada pilots have been to see me in my riding of Etobicoke North, which is very close to the airport. The seniority issues are very serious for Air Canada pilots. Whatever happens I would like to see the airlines, if merger has to be the solution, deal with it in a very complete and concrete way.

If merger is the only answer there are some exciting possibilities. For too long in Canada we had Canadian Airlines and Air Canada beating each other up, sometimes deliberately, while at the same time the international carriers were coming in and picking up our business.

If we end up with one airline with some rules and benchmarks in terms of competition and service, it will be our job as legislators to put that into play. I think the prospects are incredible exciting. We can then take on the world with whatever airline comes out of this and actually create a very profitable airline that serves all Canadians very well. We are not there yet and still have some more work to do.

There is the question of providing a regulatory framework. We have Canadian Airlines and Air Canada with regional carriers. Some of the regional carriers like Air Nova, Air Ontario and Canadian Regional are owned by the major airlines. Somehow there has to be some rationalization of that capacity. I am not quite sure how that will work without ending up with a monopoly situation.

I look back to an experience in Toronto of a few years ago when we had a neat little airline called City Express. It was flying out of Toronto Island, Montreal and Ottawa. Some entrepreneurs put together the airline using Dash 8s. It was a great service. It was going very well. Suddenly Air Ontario came in with deep pockets and priced City Express out.

I am concerned about that. How do we make sure that if we have a monopoly type situation there will be competition. I am hopeful we can reach some sensible conclusions around that. We talk about the rhetoric of a two airline policy but in Canada we have about a six airline policy. There was a time when it was Air Canada and Canadian Airlines, but now we have some very serious players in the market; Air Transat, Canada 3000 and the WestJet.

As long as we can create an environment that is friendly to them and if we end up with one airline, perhaps that will be part of the solution on competition. We really have to apply our minds. The airline industry has to be much more creative. I do not want to pick on Air Canada, but frankly I am not that keen on the Onex bid either.

To line up Lufthansa and United and flow the money through to the shareholders, throw something into Hamilton and not deal with the capacity issue, would not be highly constructive. I am not sure that what is on their minds is picking up the pieces of Canadian Airlines.

I know we have talked about it but I will put it on the floor here. I do not think Canadians have a big appetite for that. The Government of Canada assigns the international routes. The other day I asked someone from Air Canada whether Air Canada presumes the international routes, if Canadian Airlines flounders, would be allocated without any question to the new Air Canada. It seems to me that our government would have options. I do not know. I am not privy to those considerations of the government. We could take Air Canada's international routes and give them to Air Transat or Canada 3000. Why are we obliged to give them to any surviving airline? We have options.

I hope that all the players in the industry would stop playing games, apply their minds, be creative and try to come forward with propositions that meet our public policy objectives and the concerns and needs of all Canadians. As legislatures let us get down to the business of setting the policy framework that will make this happen in a way that is acceptable to the Government of Canada and to all Canadians.

[Trucking Industry, October 19th, 1999]

Mr. Speaker, it is my pleasure today to bring to the attention of the House that many of the key representatives of Canada's trucking industry are with us in Ottawa today.

It is important to remember that trade is one of the engines of economic growth for Canada. With a relatively small population spread thinly over a vast distance, Canada does not have the luxury of neglecting transportation and trade.

In my riding of Etobicoke North we are close to the Pearson airport and the 400 highways. We know very well why the trucking industry is so vital to Ontario's economy. Total commercial trucking accounts for approximately 400,000 jobs.

I am pleased to see the trucking and railway industries working together to ensure an efficient and safe transportation system that will continue to benefit local and national businesses and, in turn, keep our economy strong.

That is why we must work closely with Canada's trucking industry to ensure that we have an environmentally sound and sustainable transportation system into the next millennium. Working together, Canada's trucking industry keeps Canada rolling.