Madam Speaker, two days ago I rose to ask some questions about the Canadian Airlines International situation and asked if the federal government had done any substantial analysis of that situation and what changes, regulatory or financial, the government was prepared to make in face of the potential losses that were described by some analysts on the west coast.
They had looked at the situation and had shown that if there are 16,400 jobs lost, which is the employment at Canadian Airlines, another 54,000 indirect jobs would be lost at airports, ticket outlets, agencies, fuel suppliers, caterers and so on. The total loss in contributions to unemployment and pension funds would be $314 million.
The total loss to the federal government in income taxes would be an additional $1 billion. The loss in GST rebates would be $21 million. The loss in fuel, airport taxes and other minor taxes would be an additional $225 million. The taxes lost to declining disposal income would be an additional $168 million. For those who are able to get jobs their income would decline. Unemployment insurance costs for all workers for one year would be $1.5 billion, making a total of $2.9 billion in losses to the federal treasury.
If 30 per cent of the employees find work immediately within a year, that loss is reduced to $2.5 billion. If two-thirds of them find employment, the loss goes down to about $2 billion, but there is still a new loss to the treasury for the first year after Canadian Airlines hits the wall, which is now expected to be the case about November 30 if nothing else changes.
The federal government will lose between $2 billion and $3 billion. I would have thought the government would have had a contingency plan available. According to the response I got that did not seem to be the case. That was strange because in June 1993, just prior to the last election, the Liberal leader of the day who is now Prime Minister said that the key features of his airline policy would be safety, competition and Canadian control. He went on to promise that he would do something to make the industry more stable.
This you will remember, Madam Speaker, was about a year after a previous restructuring of Canadian Airlines International and at which point the company successfully urged some of the employees to buy stock in the airline at $16 a share. Those shares are now worth about $1.80. We do not hear them offering shares any
more to employees, they are simply offering wage cuts of 10 per cent. Yet even the Prime Minister has said a loan would not make this company any more profitable, it just extends the problem a few more months or years. A 10 per cent cut in wages is equivalent to a loan.
I think the government, given that it has more than $2 billion at stake, should do a better job of handling this situation.