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37th PARLIAMENT, 1st SESSION

Standing Committee on Finance

COMMITTEE EVIDENCE

CONTENTS

Thursday, February 21, 2002

0935

The Chair (Mrs. Sue Barnes (London West, Lib.))

Mr. Epp

The Chair

The Clerk of the Committee

0940

The Chair

The Clerk

The Chair

Mr. Lawrence McBrearty (National Director for Canada, United Steelworkers of America)

0945

0950

The Chair

Mr. Epp

Mr. Lawrence McBrearty

Mr. Epp

Lawrence McBrearty

0955

Mr. Epp

The Chair

Mr. Lawrence McBrearty

The Chair

Ms. Pauline Picard (Drummond, BQ)

Mr. Lawrence McBrearty

1000

Ms. Pauline Picard

Mr. Lawrence McBrearty

Ms. Pauline Picard

Mr. Lawrence McBrearty

The Chair

Mr. Wilfert

1005

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Lorne Nystrom (Regina--Qu'Appelle, NDP)

Mr. Lawrence McBrearty

Mr. Lorne Nystrom

Mr. Lawrence McBrearty

1010

The Chair

Mr. Roy Cullen (Etobicoke North, Lib.)

1015

Mr. Lawrence McBrearty

Mr. Roy Cullen

Mr. Lawrence McBrearty

Mr. Roy Cullen

1020

The Chair

Mr. Lawrence McBrearty

Mr. Roy Cullen

The Chair

Mr. Scott Brison (Kings--Hants, PC/DR)

Mr. Lawrence McBrearty

The Chair

Mr. Scott Brison

Mr. Lawrence McBrearty

1025

Mr. Brison

The Chair

Mr. Monte Solberg (Medicine Hat, Canadian Alliance)

Mr. Lawrence McBrearty

Mr. Monte Solberg

Mr. Lawrence McBrearty

Mr. Monte Solberg

Mr. Lawrence McBrearty

Mr. Monte Solberg

1030

Mr. Lawrence McBrearty

The Chair

Mr. Monte Solberg

Mr. Lawrence McBrearty

Mr. Solberg

Mr. Lawrence McBrearty

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

Mr. Lawrence McBrearty

Mr. Shawn Murphy

Mr. Lawrence McBrearty

Mr. Shawn Murphy

Mr. Lawrence McBrearty

Mr. Murphy

Mr. Lawrence McBrearty

The Chair

1038

The Chair

Mr. Epp

1040

The Chair

Mr. William Elliott (Assistant Deputy Minister, Safety and Security Group, Department of Transport)

Mr. Epp

Mr. Serge Dupont (Director General, Tax Policy Branch, Department of Finance)

1045

Mr. Epp

Mr. Serge Dupont

The Chair

Mr. Epp

The Chair

Ms. Pauline Picard

1050

Mr. Serge Dupont

Ms. Pauline Picard

Mr. Serge Dupont

Ms. Pauline Picard

Mr. Serge Dupont

Ms. Pauline Picard

The Chair

Mr. Roy Cullen

1055

Mr. Jacques Parent (Acting Assistant Secretary, Infrastructure Canada)

Mr. Roy Cullen

Mr. Jacques Parent

Mr. Roy Cullen

Mr. Jacques Parent

Mr. Roy Cullen

The Chair

Mr. Gérald Lalonde (Senior Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance)

1100

Mr. Roy Cullen

The Chair

Mr. Roy Cullen

The Chair

Mr. Scott Brison

Mr. Gérald Lalonde

Mr. Scott Brison

1105

Mr. Serge Dupont

Mr. Scott Brison

Mr. Serge Dupont

Mr. Scott Brison

Mr. Serge Dupont

Mr. Scott Brison

Mr. Serge Dupont

1110

Mr. Scott Brison

Mr. Brison

The Chair

Mr. Shawn Murphy

Mr. Serge Dupont

Mr. Shawn Murphy

Mr. Serge Dupont

1115

The Chair

Mr. William Elliott

The Chair

Mr. Epp

Mr. Serge Dupont

1120

Mr. Epp

Mr. Serge Dupont

Mr. Epp

Mr. Serge Dupont

Mr. Epp

Mr. Serge Dupont

Mr. Epp

Mr. Serge Dupont

Mr. Epp

1125

The Chair

Mr. Serge Dupont

Mr. Epp

The Chair

Mr. Tonks

Mr. Jacques Parent

Mr. Tonks

Mr. Jacques Parent

Mr. Tonks

Mr. Jacques Parent

Mr. Tonks

Mr. Serge Dupont

Mr. Tonks

The Chair

1154

The Chair

1200

Mr. Lorne Nystrom

The Chair

Mr. Jason Kenney (Calgary Southeast, Canadian Alliance)

1205

The Chair

Mr. Valeri

The Chair

Mr. Wilfert

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Epp

1210

The Chair

Mr. Wilfert

The Clerk

Mr. Ken Epp

The Clerk

Mr. Ken Epp

The Clerk

Mr. Epp

The Clerk

Mr. Epp

The Clerk

The Chair

1215

Mr. Wilfert

Mr. Jason Kenney

The Chair

Mr. Kenney

Mr. Roy Cullen

The Chair

Mr. Lorne Nystrom

The Chair

1220

Mr. Wilfert

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Tonks

The Chair

Mr. Valeri

Mr. Tony Valeri

Mr. Jason Kenney

The Chair

Mr. Kenney

Mr. Valeri

Mr. Jason Kenney

Mr. Valeri

1225

The Chair

The Clerk

The Chair

Mr. Epp

The Chair

Mr. Epp

The Chair

Mr. Epp

The Chair

Mr. Wilfert

The Chair

Mr. Jason Kenney

The Chair

Mr. Valeri

The Chair

1230

Mr. Epp

The Chair

CANADA

Standing Committee on Finance

NUMBER 079

1st SESSION

37th PARLIAMENT

COMMITTEE EVIDENCE

Thursday, February 21, 2002

[Recorded by Electronic Apparatus]

¿ (0935)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Good morning, everyone. My gavel is temporarily missing so we'll start with the ding of a glass.

We have a fairly long agenda this morning. We'll start off with the order of the day, which is Bill C-49, An Act to implement certain provisions of the budget tabled in Parliament on December 10, 2001. We're going to hear witnesses from 9:30 to 10:30, unless we use less time. From 10:30 to 11:30 some financial officials will appear before us, for any of those who had wanted to ask additional questions of them. Then at 11:30, as we agreed on Tuesday, we will be going clause by clause. We have the room until 1 o'clock. Hopefully, we'll be done before then. I will try to make sure we get in all those who wish to ask questions, but we do have limited time, and I'd like to be fair to everybody here.

Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Madam Chair, in view of the importance of this bill, I think if we can't meet the arbitrarily set deadline of doing the clause-by-clause today, I would be quite content to push it into next week so that we can be thorough. I go by that old adage that says if you don't have time to do it right, when will you find time to do it again?

The Chair: Thank you very much, Mr. Epp. The other day, when we did reach a consensus on the point, we felt that it was. But we will go along and hear our witnesses today, and hopefully you'll get your questions answered. As you know, we did contact all of the witnesses you mentioned the other day. We might as well put that on the record. Mr. Clerk, could you just go over that?

The Clerk of the Committee: Last Tuesday I did contact the witnesses the committee had agreed to invite. In the case of First Air, I spoke to the president, Mr. Davis, and he was supposed to get back to me. I have not heard from him since Tuesday. WestJet and ATAC, of course, agreed to come. We heard them yesterday. The Canadian Tourism Commission declined our invitation. There were two other groups, Eastern Provincial Airways and the Canadian Airports Council. Both were contacted. In the case of the Canadian Airports Council, they were not available to come on Thursday, and in the case of Provincial Airways, I left a message but they have not returned my call.

¿ (0940)

The Chair: What about Air Canada?

The Clerk: Air Canada contacted my office and indicated they were interested in appearing. Subsequently, I received further calls indicating they were no longer interested in appearing or submitting a brief.

The Chair: Thank you very much.

As you know, yesterday we received a request from the steelworkers, who were in town and were willing to appear this morning. I had already sent out the notice for clause-by-clause to start at 9:30, so I amended it to give us the opportunity to hear from them. I'd like to welcome Dennis Deveau, government liaison, legislative department; Robert Falconer, department head of education; and Lawrence McBrearty, the national director. Please forgive me if I've mispronounced your name. It was not intentional.

What is most important is your presentation here. You've been before committees before. A ten-minute presentation would give people a chance to ask questions and engage in a discussion. Please go ahead, sir.

Mr. Lawrence McBrearty (National Director for Canada, United Steelworkers of America): Thank you very much, and thank you for giving us the time to come in this morning. We tried to gather a document together last night, but unfortunately we didn't have our translators available to translate it into French. If a French copy is necessary, it would be a pleasure to translate it into French.

Attached to the document you'll see that there's a steelworker policy regarding security all around the country, not only in the airports but as a question of national security.

As Madam Chair mentioned, my name is Lawrence McBrearty. I'm the national director for the United Steelworkers in Canada. Our union represents around 180,000 men and women who work in all the sectors of the industry in the country. We represent over 25,000 men and women who work in the security industry across the country. Approximately 1,000 work in the airports, mainly in the 90 airports that are mentioned in the proposed legislation.

Since September 11, we've been very active with people in government, mainly the Minister of Transport and his colleagues, regarding our concern about the security in the airports, but also our concern about national security in other sectors of the country, which we call strategic sites across the country.

As I repeat very often to the people we meet in government and to the employers, we're not here to cause a problem; we're here to be part of the solution. Being part of the solution means that we want to take care and we want the citizens of Canada to feel they're home free and also that they are travelling in a secure environment.

I just want to mention that since these discussions have been going on, I believe the experience we have as a union, and mainly our members.... We have over 30 years of experience in the security industry in the country. We've been representing people in the airports for over 30 years.

I just want to make a broad little opening here. For your information, we did have quite a few meetings with Mr. Collenette and his office and other ministers around all the questions of security in the airports and other strategic areas in the country, but mainly the airports. We have had some very good meetings, very progressive meetings. We're only here today because there are two issues that we weren't able to come to an agreement on or discuss. I want to tell you that the office of the minister was very open.

The issue of training that is in the proposed legislation, the issue of licensing or certifications, is something we totally agree with. We've always mentioned, especially since September 11, that our people were not receiving enough training. They were receiving basic training only, but not the necessary training to respond to the needs of the country in regard to security. We've been sitting with HRDC to set up a security council--employer, labour, and government--to develop all the questions of the training in all the sectors of security across the country, not only the airports.

Another subject that was very important to us was the question of the retention, the question of wages and income, the working conditions of the men and women who work in the security industry, and the very large turnover. With regard to that, we believe the legislation is going to foresee a sort of standard on wages that will be developed, hopefully in the near future, and we would like to be part of that. We have many views on that.

For example, in the province of Quebec for many years now we have been able, with the government in Quebec, to stabilize the income of the security people who work in that industry by negotiating a common collective agreement, and we've been able to have this major basic collective agreement pronounced as a decree in Quebec. Any security company that operates in Quebec cannot pay below those wages, which are sort of a standard. It did help civilize the industry, because the security industry and employers steal contracts from one another with a half-cent or a ten-cent bid. So we've been able to do that, and we have an open mind on that.

Today we'd like to talk to you about two main issues that concern us very much. They are the question of successor rights and the question of the composition of the board of the new authority.

I don't intend to read through the document. It's very legal. It was written by our lawyers. I'm not a lawyer, so I'm going to depend on them. I'm just going to say my mind here, and I think that's the best way to do it.

¿ (0945)

With regard to successor rights, as we all know, the Canada Labour Code does not cover the aspect of security guards, because they are subcontractors or contractors of a main employer. They are not covered under the Canada Labour Code. In other words, when a contractor, for example, Securitas, Group 4, or Guarda, which are private companies, lose their contract to another bidder, the men and women who work for that company A are not covered or do not transfer automatically to the new employer, and if they are unionized, their collective agreement does not follow. The stability in the airport is in question at that time--the stability of the workforce and the whole question of training. It is always a turning wheel. This is why there's a very large turnover in security in the airports and other strategic areas across the country.

We know that in the industry the wages, depending on the province, are from $5.45 per hour up to $15. But $15 or $16 or $17 per hour is when you are armed--you have a pistol or you have a licence that has been authorized by either the provincial police of that province or the ministry of justice or whatever. In the airports, the highest wages are in British Columbia and probably in Quebec, where they are about $11 to $12 per hour. Yet the airport in Ottawa is around $7 and something per hour. As regards the other airports across the country, one of them is $5.45 per hour. We want to tell you that the men and women who work in the industry--and a lot of the women who do work in the security industry are mainly women who have children and who are alone--if they can find a better job, they'll find a better job.

We believe that if we can provide good training and maintain the workforce there, it will create stability. To create stability we believe there should be successor rights. We understand very clearly that to request the labour minister or the government to amend the Labour Code to include all contractors who would be covered by successor rights would cause a problem across the country, because you would have a lineup of contractors at your door saying they don't want it.

We don't want to open that can of worms. We'll fight that battle in another commission, if you want to. In this case, we understand that if you have special legislation following on the consequences of September 11, the government can put into that new legislation whatever it thinks is there to cover the security of the country.

Having successor rights in this legislation would stabilize the workforce, would stop the high percentage of turnover, and would also be a cost saver, because if the turnover keeps on with no successor rights, we're going to have to start at day one to train and retrain and train and retrain the men and women who work in that industry.

The document we have presented to you, which we have sent to other ministries in the government, expresses our views of how a successor right clause or article could probably fit in the legislation we're talking about today and that you will be debating further on.

You will see in there that it does not impose, we believe, any increased responsibilities or liabilities on the government or the authorities. It only establishes that men and women who are going to be working in the industry can depend that they will be able to be comfortable in secure employment by having successor rights and not having to be worried that every year or every second year, or every five years, or every six months--whatever--their job is in jeopardy because the contractor or the employer could change.

With the new authority that is coming, we understand there could be some bids. The private security firms could still be there if they answer the security needs, including criteria such as the workforce. By having successor rights, it will definitely stabilize the workforce in that sector around the airports, and it will definitely establish a better relationship between all concerned in that industry.

With regard to the composition of the board of directors of the new authority, we feel that labour should be represented on the board.

¿ (0950)

I'm not going to argue here today how many seats we want to have. In the labour movement, when we have a seat we're very comfortable with it, because sometimes we don't have any seats at all. In the composition of the board, if industry is there, if government is there, and all the stakeholders are there--I understand that citizens will be represented, too--I think the workers should be represented by their union. And we would be very glad to put forward names.

We understand how these boards work. We understand questions of the credibility of the boards. We would be ready to suggest names--a pool of names--where you can choose. They would be people who know the industries, who know the politics around the security in the airports, who understand how boards of directors work and how these authorities work, but who also understand the situation of the men and women who work in the security industry.

The Chair: Thank you very much for that presentation.

Mr. Solberg, or Mr. Epp, you have five minutes, please.

Mr. Ken Epp: Thank you.

I would like to ask you, with respect to what's happening now, when we go to the airport and we go through security, are the people present there right now unionized, and are they under your particular jurisdiction across the country, or where?

Mr. Lawrence McBrearty: No. The working men and women in that industry are not all unionized, but in the main airports they are. Either they're part of our union or part of another union.

Mr. Ken Epp: Okay. I would like to ask you a question then about representation on the board. You make a fairly compelling argument here that you are also stakeholders in this. What we want, in my view as an air traveller, is a very good system at the airports that will mean the airplane is going to take off and is going to land again.

It seems to me--and I don't know if you have an opinion on this--that our government and the people who drafted this particular legislation are not thinking like criminals. You know, if you want to beat an enemy, or if you're on a football field or playing hockey, you have to anticipate what the other guy is going to do so you can defend against it. I think of all the things terrorists could do, right now we are half or one-third plugging one little hole where they may repeat what they've done before; but there are 4,000 other things they could do. Is your union at all concerned about that aspect of it?

Mr. Lawrence McBrearty: Yes, we're concerned, as every other citizen is concerned. But I'm glad you asked the question, because I would like to clarify that many of us in Canada believe the question of security, or what happens on the airlines, or what happens at airports, is all the fault of the screeners, because somebody passed with a jackknife or whatever. We strongly believe--to answer the question about security--it's not only the responsibility of the men and women who work in the security industry; it's also the responsibility of all Canadian men and women, everyone.

I used to have a little pocket knife before September 11 that I kept in my briefcase. Since September 11 we have been told in Canada we should not try to bring on board any sharp items, so I got rid of mine and I don't try to carry any. I know I'm not supposed to pass on a red light. Why should I try to carry on a revolver or a Swiss Army knife or anything just to try to test the screeners?

Let me tell you, since September 11 we as a union have been meeting our people on a regular basis because they feel very insecure. We have had to have some of them visit doctors because they read in the papers.... I'll tell you the best one. Some travellers are telling our screeners the $12 or $24 that is going to be added on the ticket is money to increase their wages. I hope it is. If it is, good; we'd love that.

But these men and women need more respect. They are a great part of the security around the airports. Their credibility is on the line. They're doing a very good job. They want to do a better job. This question of security, whether it be in the airports--what I call in the basement loading the luggage, because there are security guards there also--or on the flights as such.... What we're putting out is that security is the responsibility of everyone, so--

¿ (0955)

Mr. Ken Epp: I have limited time, so I'm going to interrupt you, if I may.

I have one more question with respect to successor rights. What you're actually asking is that this particular bill include a clause that is not in the Labour Code. Would you prefer that the Labour Code be amended, or is your suggestion here adequate? If we put that into this bill, the next time this comes around and we start having people in other areas working in security, you're going to come again and again, and again. What's your suggestion on that?

That's my last question. I want to share my remaining time with Monte.

The Chair: There won't be any more time to share.

Mr. Ken Epp: We'll get him in the next round then.

The Chair: Please go ahead.

Mr. Lawrence McBrearty: Because of the particular situation, because of the difficulties of trying to put it in the Labour Code at this time, it would not be feasible, and we feel it should be in this legislation.

The Chair: Thank you.

[Translation]

Ms. Picard, please, you have five minutes.

Ms. Pauline Picard (Drummond, BQ): Thank you, Madam Chair.

I listened attentively to your presentation and I had a quick glance at the French version of your document, as we have just received it, and read that the Steelworkers' Union is prepared to train the security officers as well as help establish the security standards.

You are asking the government to consult you because at this time the security measures or standards or training are incomplete. This is not a loaded question, but I would like to understand the following: what could you say to convince us that you are truly qualified to give this training and to establish standards that could serve to reassure us in terms of security?

Mr. Lawrence McBrearty: First of all, as I said earlier, we have set up a security council made up of employers and labour, which in itself is not something new, although we do not yet have a council involved with standards. These standards should be set according to demand and need, which, if I understand the new legislation correctly, would be ordered or set by the Department of Transport.

With respect to training, the union is not involved in that. We try to take part along with our members and those who might be interested in responding to the needs of the industry.

Once all parties are in agreement—and this is how our sectoral councils operate—on the need for training, we asked the CEGEPs in Quebec, or the colleges, in the other provinces, to supply the training.

This is what is done at this time in the mining industry, as well as in the steel and other industries within the country's various economic sectors. That is how we set the standards throughout the industry. In this particular case, it would be for the airport security industry.

Standards could be set. They are set by the government, but they must then be delivered, they must be implemented and training modules are required. The training modules are usually developed by stakeholders, but the CEGEPs or colleges are the ones who do the training.

À (1000)

Ms. Pauline Picard: When security officers are hired at the airports now, are they required to have a licence or must they prove that they have been trained to do the job with all of the responsibilities that it entails? Does the training vary from province to province and are the hiring requirements for the training of security officers different?

Mr. Lawrence McBrearty: I believe that the department has comprehensive, general requirements. With respect to the training that is given, it is strictly a basic 40, 50 or 60-hour course.

Ms. Pauline Picard: Is the training given by airport administrators or--?

Mr. Lawrence McBrearty: It depends. Sometimes the airport does the training, but in general, it is done by... I can't tell you exactly who does the training, but I can find out.

With respect to qualification or licensing, in Quebec, for example, this is done by the provincial police force. In other provinces, the workers themselves don't have a certificate but rather the employer, in some provinces, receives a certificate either from the airport authority, or from the provincial police or some similar body. So it differs from province to province. In some provinces, the employees themselves hold a certificate. In other provinces, the company has the certificate.

What we understand here, with this new legislation, is that both the employer as well as the men and women working for that employer must have certificates. We all agree with that.

[English]

The Chair: Merci, Madame.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Madam Chair. I'll be brief.

As vice-chair of the Subcommittee on National Security, I, and other colleagues, had the opportunity to meet with all three of these gentlemen. I must say that they put forth some very clear and salient points with regard to the issue, for example, of board composition, and I think it was clearly stated that the minister is going to review that. But for an important stakeholder, it certainly is an important consideration.

There's an issue of training, and I think linked with training is the issue of wages. Obviously, to have very clearly set rules with regard to training and to assure the public of a certain high-quality standard will be important. In doing so, I do believe, Madam Chair, part of that would be an increase in wages, and keeping those employees in the job much longer than currently has been outlined by members of the United Steelworkers of America.

They did furnish me with your brief at our meeting about three or four weeks ago. I'll just say, on the record, that I think it's very encouraging that they've indicated before, and obviously today, that they want to be part of the solution. I think it's very constructive that we've entered the discussion. I don't know if we're going to answer all of their questions today, but I think it's certainly a good basis to continue, and hopefully to come to some kind of resolution in the near future.

À (1005)

The Chair: Is that all, Mr. Wilfert?

Mr. Bryon Wilfert: That's it.

The Chair: Okay.

Mr. Nystrom, for five minutes.

Mr. Lorne Nystrom (Regina--Qu'Appelle, NDP): Thank you, Madam Chair.

I want to welcome the steelworkers here this morning and say that I think they made two very constructive suggestions. When we were questioning him yesterday, the minister was very positive in his response in terms of reviewing these and going back to other people in the government to see whether or not they can include these in the bill, as part of the legislation. So I think it's very useful to have Mr. McBrearty and his colleagues here this morning.

I wanted to ask Mr. McBrearty about the composition of the board.

Can you give us a few examples of where union participation on the board has been helpful, in terms of the workers' point of view being known and in the facilitation of that particular industry, whether it's in the private or the public sector? It might be useful to know, in terms of drafting the appropriate amendment to the legislation that's before us today.

Mr. Lawrence McBrearty: Sure.

If my memory serves me right, I believe the president of the Canadian Labour Congress was a member of the board of the airport authority in Toronto. We have labour people, we have people from our union, who are members of boards of corporations.

As you know, since the early eighties, in Canada, as in other countries, we went through a lot of economical crises and had to go through a lot of restructuring in many companies.

We went through restructuring, for example, in the steel sector, namely Algoma Steel in Sault Ste. Marie, and up until about a month ago we did have two to three seats on the Algoma board that were for labour. But with the near bankruptcy of Algoma Steel, the judge decided on the composition of a strictly new board. We still have some appointees there.

We sit on boards, and we know there are sometimes decisions or discussions with boards of directors where there is this confidentiality. So when our people sit on boards and they receive information that the board decides is confidential, we authorize that it does stay confidential. We work a lot with corporations on their boards. It's common now that we have labour in North America sitting on different boards to represent the voice of labour, and to represent the issue of the importance of whatever board we sit on.

Mr. Lorne Nystrom: I think the same thing is true in the auto industry as well. The CAW sits on the board of DaimlerChrysler Corporation, if I'm not mistaken. But there are many other examples of different unions across the country, in terms of the private sector.

On successor rights, I wonder if you could elaborate a bit more. If you have workers who feel secure in their jobs and employment, in terms of their families, they are going to be happier workers and do a better job. It makes an awful lot of sense.

I wonder if you will be able to provide the committee with some draft wording on what you would like to see in our report, or draft suggestions, to flesh it out a bit more. Do you have any comments on what the costs might be? We'll be asked that question down the road as well. Will there be a cost attributed to making sure we have successor rights in the legislation?

Those are some of the issues we'll probably be met with as we proceed down the trail.

Mr. Lawrence McBrearty: In a document we submitted this morning, Madam Chair, we have some suggestions on the language of successor rights and obligations. We also explain very clearly the importance of successor rights.

We presented to you--and I don't want to go through it because it's a little legal and long--something that was in the Ontario labour legislation some years back that is not there any more. We presented two sorts of language there, to help you review what we mean and to help the committee, if they're willing to read through that. I believe it would answer the needs in this sector.

It also shows there's nothing new going on in the country. It's something that was there and is still there. Mind you, we have to understand that successor rights are nothing new in labour legislation. Just about all provincial labour codes have successor rights. Some are better and some are less. We have one in the federal labour code also. But there are some labour codes that used to cover contractors that don't cover them any more, and some still do, partially.

On the question of costs related to this specific case of security in the airports, I don't see where it would be an additional cost to have successor rights, but I do see that it would be less costly to have successor rights.

If you don't have successor rights, you're caught with a higher turnover. Company A has a collective agreement and working conditions that are hopefully standard across the country, and there's a bid out. Company B goes on the bid and gets the bid, but there are no successor rights. Company B does not have to take over the employees of company A or the collective agreement. Company B comes in with new employees, and we start the training all over again. So there's a cost there. Let's not forget that the highest cost in the labour force is training--and to maintain people in their jobs.

There are some difficulties around this, we understand that, but we are ready to sit down and say very openly that some difficulties brought to us, in our view, are not necessarily difficulties.

An employer could say, “I'm coming in and I have a provincial certification to cover all security in the city of Ottawa”. This company B could go on the bid for the airport and receive the contract. On its provincial-wide certification, company B has a union called union A. So the company could say, “I have to go there with my union and my employees because I have a province-wide certification”.

I just want to tell you there's a big difference between a province-wide certification and a federal jurisdiction certification. When you have a provincial certification for the city of Ottawa, it does not include any federal jurisdiction buildings. It includes provincial authority buildings.

So if company B comes to the airport and says they want to bring their workforce, that's what I call negotiations. But any company in this industry will not refuse that there be successor rights in the federal jurisdiction, mainly in the airports.

In our view, probably because we work in this day after day, it's very simple. But we strongly believe that in the case of this legislation, having successor rights would do a lot of good. It would stabilize things and secure the people.

À (1010)

It would also make the travellers feel more secure to see that it's not always new faces taking care of them at the airports.

Secondly, it would be less costly for the training, because the only thing you would have to do would be the up-skill training. Once the people receive basic training, after that it's up-skill training.

The Chair: Mr. Cullen and then Mr. Brison.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Madam Chair, and thank you for the presentations.

On the first point, the membership on the board, I personally would support that. I think labour should be at the table. In the GTAA, the Greater Toronto Airport Authority, the organization I'm familiar with, there is a designated labour representative, and I think that's quite appropriate.

With respect to successor rights, I'm going to be the devil's advocate. I'm a little confused. My experience with successor rights is that it's basically a question of whether a union agreement would carry over to a new environment if you move to an authority, let's say. In other words, it's a question of whether that collective agreement would apply.

Often those issues are fought out with lawyers and the labour board, whatever. I think what you're saying is that unless it's legislated, your union would not win successor rights. I understand that. Are you not saying that?

Mr. Lawrence McBrearty: Yes, I am.

Mr. Roy Cullen: Okay.

With successor rights, I thought I understood you to say that right now, there is a challenge with turnover of the employees. If you take the collective agreement you have now and move it into a new body, what is that going to do in terms of turnover? Unless the union is able to negotiate other benefits or more training.... By just taking that same agreement and moving it to a new authority, what is that going to do to improve the training and to improve the turnover statistics if you have the same collective agreement?

A new authority might decide to change the job profiles. They might say we need somewhat different skill sets, or, in terms of work rules, they might decide they want to change things around. But if there were successor rights, they would be prohibited from doing that unless the union agreed to those changes, in terms of the negotiations. Am I correct?

Those are my two questions.

À (1015)

Mr. Lawrence McBrearty: In terms of successor rights, we can see it very complicated or we can see it very simple. In our book, successor rights are very simple.

If I'm working in security for Securitas at the airport in Ottawa, and the new authority comes in and decides on the work rules, decides on the job profile, and all that, that is what we call management rights. That has nothing to do with successor rights. Employers, or the new authority, can establish new rules at the airport any day of the week. They can establish what the profile needs to be, what the criteria are, what the training should be, etc. The only time successor right applies is when there is a change of employer.

So if I'm working for Securitas today and six months from now a bid goes out from Group 4, which is another security company, and Group 4 gets the bid, the only thing successor right does is Group 4 is obliged to take the collective agreement in place, and also the workforce, the workers. That's what successor right means.

Mr. Roy Cullen: If a new authority took over that new collective agreement, if successor rights applied, or even if there weren't successor rights, a new authority might well decide to take all the employees or some of the employees. I grant you it doesn't give the same level of security. In terms of turnover, I thought you indicated that right now there is a high level of turnover. I'm not sure what entrenching successor rights in this bill would do to turnover on an ongoing basis.

You might say today that if we have successor rights, we might have more job security, but unless there are more benefits negotiated in the collective agreement, what's going to keep people there?

Mr. Lawrence McBrearty: Yes, you're right. There have to be. I think the Minister of Transport, Minister Collenette, and the Minister of Finance, when the budget came out, mentioned the question of benefits and wages and even the word “retention”. We know what they mean by that and we agree with it.

We've been talking with some people and saying there has to be some sort of basis, some standards. I think it's pretty clear in the minds of the people involved--in government and elsewhere--that the conditions of the men and women in that industry, in the airport especially, involve low wages, not much security, and not much training. So we went through these three aspects.

By doing these three things, you're stabilizing the workforce, because they feel more secure and have a better income. Added to that--and I want to come back to your main question on successor rights--is that successor rights in a way also stop the turnover because a new employer may come in, but the trained workforce stays. If a new employer comes in and brings in a new workforce, then you'll have to start the training over again because they are new employees.

Mr. Roy Cullen: Let's say the government goes to this authority now in terms of successor rights. That applies today. But are you thinking that the government might then carhop the authority and privatize it to someone else later? Once you have successor rights, in the transition it's either there or it isn't--today.

À (1020)

The Chair: A short answer, please.

Mr. Lawrence McBrearty: No, if successor rights are there, they stay. It's not only for the transition. They stay for all the operations for now or never.

Mr. Roy Cullen: I know that.

The Chair: Thank you.

Mr. Brison, your turn, please.

Mr. Scott Brison (Kings--Hants, PC/DR): Thank you, Madam Chair. Thank you to all who are before us this morning.

I don't think there are many of us who would disagree with the concept or the notion of labour on the board. Whether you look at your industries or even at the auto workers' union, the fact is that most or all of the major North American automobile manufacturers have CAW reps on the boards to ensure commonality of interest, particularly in a post-September 11 context. On security issues it's important.

But with some of the security workers being unionized and some not being unionized, with it being possible that some would be represented by other unions other than your union, why would your union take that board seat as opposed to some other union? I guess that's the difficulty. Which union would represent all of the security workers, recognizing that there could be more than one union, and some will not be unionized at all?

Mr. Lawrence McBrearty: We're not necessarily asking that the seat be allocated to the United Steelworkers. We're asking that a seat--or how many seats they decide on--be allocated for labour representation. On that we could suggest names. What it would mean is that there would be a seat there for labour where labour could suggest names, but whichever body in the government that will make the choice.... I think that's already defined or recommended by the Minister of Transport to the higher authority. But as for the United Steelworkers, we don't want it. I don't have time for that seat anyway. I'd rather be there criticizing behind the board.

Some hon. members: Oh, oh!

The Chair: Sometimes that's an easier job.

Mr. Scott Brison: I'm not sure. That idea terrifies me.

With something as important as security, and the training required, Mr. Epp reflected earlier on the challenges faced with increased levels of security in a post-September 11 environment. With a devolution of training largely to the provinces and across Canada, do you feel HRDC needs to...? I guess the challenge is, with HRDC having devolved a lot of the training programs to the provinces, isn't it going to be awfully difficult to ensure a national approach and standard to this? I'd appreciate your reflections and input as to what you would suggest we do, because this is a national issue. It may be difficult through the lens of federal-provincial relations to implement.

Mr. Lawrence McBrearty: I hope they're unionized.

With regard to training, a lot of things have been turned over to the provinces, but in our experience, we have a lot of sectoral councils that I personally co-chair and the employers co-chair on their side, such as in the steel sector and in the mining sector, and we're setting one up now for the security industry. Through HRDC and the provinces, we've always been able to come to a common understanding.

I think the best example I could take is the province of Quebec. The province of Quebec is probably the only one that requires employers to put into training funding in their province one cent per hour worked. So when we've walked in there with our training programs for the steel sector, for example, and for our adjustment programs, there have been very successful agreements between HRDC and the province that they would use our council, which is a national council, to set up the modules and negotiate the agreements with the cegeps and the colleges to deliver the training.

So we don't see that as an obstacle right now. In fact, I had a meeting with HRDC yesterday, and they're very open on this, as are the provinces, definitely because of the aspect of security, but on a general basis we don't have a problem.

À (1025)

Mr. Scott Brison: Thank you.

The Chair: Okay. We have a couple of minutes, so I'm going to propose that we go to one Liberal and one opposition member. Mr. Solberg will start, and then Mr. Murphy is on. Then we'll go on to a brief break and switch to the officials.

Please go ahead, Mr. Solberg.

Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Thank you. My question is, how many people are currently employed in the security industry in the airports, and what percentage of them are unionized?

Mr. Lawrence McBrearty: I couldn't tell you how many working men and women there are in all of the airports across Canada, but right now we're carrying out a survey on how many working men and women there are in the 90 airports that are going to be touched by the legislation. With regard to how many are unionized, as I mentioned, we probably have 1,000 or more right now. For the other unions that are representing members there, I would say maybe 50%. I can't give you an exact figure. But if you were to ask me that a year from now, I might be able to give you an exact figure because we intend to unionize them.

Mr. Monte Solberg: My point is that obviously this proposal isn't completely altruistic. If all these people were unionized, a lot of money would flow into the coffers of the United Steelworkers through their dues. Isn't that correct? Of the 1,000 people you have today, give me an estimate of what it means to the United Steelworkers in terms of dues.

Mr. Lawrence McBrearty: It doesn't mean very much. I want to clarify that this is not a matter of dues. This is a matter of security and of--

Mr. Monte Solberg: I'll be up front. It has an impact on you, and I think it's fair to ask that question.

Mr. Lawrence McBrearty: Definitely, like taxes have an impact on everybody.

What I'm saying is that I don't want anybody to believe we're trying to be part of the solution on the issue of security for union dues. If I want high union dues, I'm not going to go to the security industry. The amount of dues for all members of our union is 1.3% of their earnings. If you have somebody working at $5.50 an hour, our union is not living on those dues. So it's not a matter of dues.

Mr. Monte Solberg: All I'm asking is for you to be clear about what's involved in terms of the benefit to the United Steelworkers.

À (1030)

Mr. Lawrence McBrearty: Our objective as a union is to represent working men and women regardless of the field, race, colour, or whatever. It's not a matter of them having low or high wages. It's to represent the people in their working conditions and their social life. One of our objectives as a union--which is in our constitution, and I can give you a copy if you wish to have one--is to help all men and women and mainly those with lower conditions and lower wages. That's the objective of our union.

When we unionize men and women all across this country, like any other organization, where there is a fee to pay, that fee covers the cost of the administration of the union. Close to 88% of our union dues is spent on human relations. If you're a service industry, over 80% of your income goes toward service.

The union wants to participate in the security of the country. It wants to represent those men and women, and it also wants them to be secure in their job. At the end of the day it gives us more members. Sure it does.

The Chair: You have two more minutes.

Mr. Monte Solberg: Just doing some quick math, 1,000 people at $20,000 a year at 1.3% works out to about $260,000. Potentially a lot of money will be coming into the coffers. I simply wanted to make the point that no matter who comes before this committee, they are to some degree self-interested and they come to make a point. Yes, they're operating on behalf of the workers, but money comes back to the union, in this case. I just wanted to make it clear that is in fact what's happening. I'm a little concerned when people are sensitive about those issues, because I think it is important to be completely up front about the impact on your own personal bottom line, which is always part of the consideration when people come forward with these sorts of proposals.

Mr. Lawrence McBrearty: Did I answer your question on the union dues?

Mr. Monte Solberg: Sure.

Mr. Lawrence McBrearty: A lot of people have the same feeling as you do about union dues and also about unions.

The Chair: Thank you very much.

Next is Mr. Murphy for five minutes.

Mr. Shawn Murphy (Hillsborough, Lib.): Mr. McBrearty, you made the statement that the whole concept of successor rights is simple. My experience is that there's no more complicated concept and one that has more litigation behind it than successor rights.

I want to develop this a little further. I just don't know how this would work, taking this concept the way you have described it and putting it into the airport industry.

I'll give you a hypothetical example. Let's take an airport that is operated by Ace Security, which is represented by the Teamsters. They have a five-year contract. At the end of the five years Wackenhut bids on the contract. They're represented right across Canada by the United Steelworkers. They get the contract. What happens then? If you follow your concept with regard to successor rights, would the brothers and sisters of the Teamsters all remain and would the Teamsters remain as the recognized agent?

Mr. Lawrence McBrearty: Yes.

Mr. Shawn Murphy: So they would continue to represent the same people and Wackenhut would be obliged to hire those people represented by the teamsters?

Mr. Lawrence McBrearty: Yes.

Mr. Shawn Murphy: And you're happy with that?

Mr. Lawrence McBrearty: Sure. I am not looking for union dues.

Mr. Shawn Murphy: I've seen a lot of fights between two unions.

Mr. Lawrence McBrearty: I understand clearly what you are saying. There has been a lot of debate around the question of successor rights. But on your question, if successor rights are there, I believe successor rights should be very simple. In some legislation, the wording on successor rights and the definitions are very complicated. But you're right in the way you explain it, and that's the way it would apply.

The Chair: Thank you very much. You have added some interesting material to our discussions here. I appreciate your attendance, especially at the last moment. I think you have helped us today. Thank you.

We will recess for about a minute until our clerk can change the cards and bring the officials to the table. So get up and stretch for a minute.

Thank you very much, everybody.

À (1033)

À (1038)

The Chair: We'll resume. Thank you very much. We have as witnesses senior officials from the Department of Finance, the Department of Human Resources Development, and the Department of Transport. We introduced them yesterday. I don't see anybody who's new here today.

We can start with a first round of questioning. Again, I propose to go five-minute rounds. I'll start with our official opposition if they're ready.

Mr. Ken Epp: Thank you very much, Madam Chair.

I am glad you came back. I have some serious questions for you. I think probably we have the wrong people here. Maybe not the wrong people, but we don't have one group that should be here, and that is the security people. As I mentioned in the previous hour, we have, I believe, an effort here to plug one one-hundredth of the holes through which the terrorists could go. There are so many other areas.

For example, we are not doing anything with trains or buses. We're not doing anything with respect to cargo. An airplane carrying cargo can be just as dangerous to a building as an airplane carrying passengers. It's just that you wouldn't have the loss of life on the airplanes but you would have just as much in the building.

I think what we need to do is to start really going to work here. As I said earlier too, start to think like these guys on the other side think. What are they going to do next? What are we going to do to head them off at the pass and prevent them from doing their dastardly deeds? I think that's the big missing link here.

Has anything been done on that? Is it just that I'm ignorant of it, or is this working? Is it all behind the scenes so that we're not even aware of it, and, if so, where's the money for that coming from?

À (1040)

The Chair: Mr. Elliott.

Mr. William Elliott (Assistant Deputy Minister, Safety and Security Group, Department of Transport): Yes, thank you, Madam Chair.

I indicated in the introduction yesterday that I am the assistant deputy minister for the safety and security group at Transport Canada. The safety and security group at Transport Canada includes responsibility for all modes of transportation.

With respect to other modes and the cargo aircraft, for example, there is in fact work under way with respect to that. The budget did provide some resources with respect to marine security. For example, we've been working with the industry and with the U.S. Coast Guard. We've also been working through the International Maritime Organization on issues, including container security, for example. There are other departments and agencies involved in a number of these issues, including Immigration and Customs.

With respect to a broader picture than issues contained within Bill C-49, the government also announced a program for the strengthening of cockpit doors, for example. We're moving forward to implement such a program. That program we envisage will include all aircraft that have seats behind the cockpit, which would include cargo aircraft and combination aircraft that have seating.

I certainly would agree that the security authority, and the roles to be assigned to the security authority, are but one piece of a much larger puzzle. We, and other departments and agencies, both domestically and internationally, are in fact trying to provide for multi-levelled, multi-layered, security in all modes.

I have one other comment, and it is that with respect to the road mode there is certainly a very important role for provinces and territories to play. Again, we are working cooperatively with other jurisdictions.

Mr. Ken Epp: Well, that partially answers the question.

My next question is going to be really hard-hitting. I don't usually do this; I'm a soft-hearted guy. But I'm on the case of the Finance people now.

Yesterday we learned that you did not even do an economic study of the impact of this tax. Now, why not? How can you actually go to the Minister of Finance and say, we recommend you do this $12 to $24 tax, and no, we haven't done any impact on what that means at all to the industry; to the Canadian economy; or all of the implications to all the many Canadian travellers and our visitors, travellers both from inside and outside the country. You actually came up with this head tax without doing an economic impact of the implications of it. How come?

Mr. Serge Dupont (Director General, Tax Policy Branch, Department of Finance): I appreciate the opportunity to clarify for the record.

Obviously, in arriving at the recommendation for the minister we looked at a range of facts. The gentleman from WestJet yesterday was citing elasticities, which are measures economists use to relate changes in prices to changes in demand. We obviously have looked at those, and there's a wide range.

One could go through the economic literature and find that depending on circumstances there are “different elasticities” for business and leisure travel and for short-haul and for long-haul, and for domestic and international, and so forth. It boils down overall--and this was actually confirmed in a letter that ATAC sent to us--to an elasticity of roughly 0.8% to 1.5%. That means if you expect to have a 1% increase in the price of travel, you may expect to have roughly a 0.8% to 1.5% decrease in the demand for travel.

Now those calculations tend to treat everything else as being equal. In other words, the world is not changed except for the price. That unfortunately is of limited guidance in the kind of circumstance the government faced in the fall, where not only did we have to take into account the impact of cost on travellers but also the impact of the concern over security.

I wish to cite a gentleman, the president of the International Civil Aviation Organization, who spoke earlier this week and indicated that ICAO has to restore public confidence in air transport. This is the top priority of air policy now.

I think what has to be assessed here is the totality of the intervention in the budget, which is the investment in security on one hand and the charge on the other. It's the total impact one has to look at. The elasticities I cited earlier would be of guidance only if travellers ascribed zero value to the additional security that will flow from the overall package.

À (1045)

Mr. Ken Epp: But we have hundreds of communities in this country from coast to coast--the Quebec people have indicated this; we are certainly in that case in the prairies--where we have small communities served by small airlines, and yet they're listed airports.

I did some calculations the other day. Even on some of the fares like Toronto to Detroit, which is one that was used here, the total taxes are now 139% of the fare--139% of the fare! And we're living in a time when even before September 11 the airline industry was struggling. Air Canada, of course, now is the big beneficiary here because they have all of the long routes and their percentage is way down, in terms of what percentage of income airlines have to pay for this security tax. But all of these smaller operators, serving very importantly a number of communities that are smaller, are being asked to pay a total of 139% or more of the fare in taxes and fees and so on.

There's an impact there that is huge, and I think you have failed to address it. I wish you would. Can you? Will you?

Mr. Serge Dupont: I'll mention what the legislation does address or speak to some of the impacts for the remote regions. You indicate that there are among the 90 core airports to be covered by the charge some small communities. There are communities that will receive enhanced security at their airports.

The flights that are covered by the charge are only the flights that connect the 90 airports. If one speaks of Iqaluit, for example, all the flights from Iqaluit to destinations that are not among the group of 90 will not have to bear the charge. So there's an impact there that is positive in terms of the carve-out of the all but 90.

The second element is that many travellers from those remote communities among the 90 would tend to feed into another airport to go onto their ultimate destination--not all the time but frequently. The way the charge is structured is that in fact it is $12 one way regardless of the number of connections one has to take in order to get to a destination and back. There's a bit of an effect there as well, in terms of the structure of the charge, to help.

If you'll allow me, I would also add that some of those communities are served by low-cost flights and some of those communities are served by high-cost flights, and applying a percentage charge, as is suggested by some in the industry, would result in a higher charge on a number of flights serving some of the remote communities.

The Chair: Thank you very much.

Madame Picard.

You were quite a bit over.

Mr. Ken Epp: Are we in a five-minute round?

The Chair: Yes.

Mr. Ken Epp: I thought it was ten. My apologies.

The Chair: But I thought the information was important for all of us to hear.

Go ahead, Madame Picard.

[Translation]

Ms. Pauline Picard: I would like to come back to what Mr. Epp mentioned earlier. It was clearly stated, yesterday, that the government did not consult with anyone before establishing these new measures. This morning I received the following information from the Tourism Industry Association of Canada. The association firmly believes that the government has misread the public's appetite for additional user fees, even when measured against the value of promised increased security, and is strongly opposed to the air traveller's security charge for the following reasons:

This tax will further hurt an industry still recovering from the September 11 terrorist activities and the economic slowdown;

The security charge represents a minimum 4% increase in the cost of travel at precisely the wrong time for our economy;

The proposed fee is punitive to Canadian travellers when considering the security tax charged in other countries;

The surcharge presents a competitive barrier to short-haul, regional and economy carriers;

The travelling public already pays too many surcharges on top of the base ticket price.

What do you have to say to that?

À (1050)

Mr. Serge Dupont: You raised a number of issues. I would like to respond to one part of your quote which is, if I'm not mistaken, a comparison with other countries. I believe that the member who spoke before you also alluded to a comparison between Canada and the United States.

In the United States, at this time, for example, for every airline ticket there is a 7.5% air transportation tax, a $3 charge for each segment of the trip, no matter how many segments are involved, with a new $2.50 charge per segment, and this increases according to the number of transfers. Therefore, there are already substantial fees added to the price of an airline ticket in the United States.

Air Canada figures were quoted earlier for travel to the United States. A good part of these charges relate to fees that are paid in the United States.

The tourism industry is putting forward a point of view. I believe that the government has chosen another viewpoint, namely, that if we are to reestablish the confidence of travellers in air travel, if we want to continue to state that Canada has one of the safest systems in the world, if we want to continue to ensure that our air carriers are ranked among the best in the world in terms of public safety, then we must have a strong, a considerable commitment. This means that it is also reasonable, under these circumstances, to ask the users to pay the cost. I think that when all is said and done, of course some people will not agree on the approach that has been taken, but I believe that the government has risen to the challenge that has been set by this new concern for security.

Ms. Pauline Picard: Mr. Dupont, I understand that you have your own version, but what makes us unhappy with you, the officials, is the fact that you consulted with no one before making these decisions.

Mr. Serge Dupont: I would simply add that in the context of preparing a budget, it is not in our tradition to enter into consultations on items as sensitive as fees or charges or taxes that might be imposed. I believe it is a parliamentary tradition, a long standing tradition in the lead-up to a budget.

Ms. Pauline Picard: Well then, I wonder what we, the members of the committee, are doing here when we undertake prebudget consultations and hear witnesses from associations in order to prepare a budget. If you say that consultation is not government policy, then I am completely at a loss; I don't know what I'm doing here.

Mr. Serge Dupont: I should perhaps mention, Madam Chair, this does not mean that the government ignores certain concerns when preparing a budget, that it does not take into account the representations that have been made; but in setting out a specific measure such as one that involves fees, we don't usually consult with the parties that would be directly affected, for obvious reasons.

Ms. Pauline Picard: I have no other questions, Madam Chair. Thank you.

[English]

The Chair: Mr. Cullen, please.

Mr. Roy Cullen: Thank you, Madam Chair.

I have a question on infrastructure, Mr. Parent, and then one on tax policy as it relates to Bill C-49, Mr. Lalonde, or if anyone else can deal with the tax policy.

On the infrastructure, the strategic infrastructure started out as a foundation. The advantage of a foundation, it seems to me, is that you don't lapse funds. There's a continuity. The Auditor General raises issues from time to time. But we're now going with a fund, as you described it. The advantage of that approach is that parliamentarians, through appropriations, are more involved in the decision-making process. I'm sure there are many priorities for strategic infrastructure right across Canada. I understand that the focus is going to be projects of national significance, but I gather that all the guidelines have not been completed.

My question is twofold. If it is a fund and not a foundation, will the funds lapse? For example, it takes some time to get these projects up and running. Will the funds lapse? Would they then go to pay down the debt? Then would the savings--because there will be savings in interest charges and carrying charges--help to fund, through annual appropriations, the projects that are going to be supported over time? Could you just expand on how this fund is going to work? Will the funds lapse? And how will it be done through appropriations, if that's the case?

À (1055)

Mr. Jacques Parent (Acting Assistant Secretary, Infrastructure Canada): I think my colleagues in Finance are better placed to answer that question. But, yes, the decision was taken to use the surplus of this year to reimburse the debt, and that saving over the course of the next year will help fund the fund. We know that those kinds of projects take time to get started, so the pressure on the expenditure of the fund will not occur in the first few years. In the first few years we'll be evaluating and approving projects. Those investments will take a couple of years. Therefore, we don't feel there will be too much pressure on the need for money for the first three years.

Mr. Roy Cullen: As a follow-up, with this act will a fund per se actually be set up, or is it a notional fund? Is there $2 billion set aside that will lapse on March 31, or is it just a notional fund?

Mr. Jacques Parent: It's a notional fund. It's a regular program and money will come through appropriations.

Mr. Roy Cullen: There's $2 billion earmarked for this. It'll come through appropriations over the next couple of years.

Mr. Jacques Parent: Yes.

Mr. Roy Cullen: That's helpful.

I have a question on tax policy for Mr. Lalonde, or whoever can deal with it. In the pre-budget consultations last year, in terms of the inclusion rate for capital gains as it relates to marketable securities donated to public foundations, there were representations made that those same rules should apply to private trusts. There was a fairly convincing case made. My impression is that there's some work being done on this.

Could you elaborate for the committee on some of the pros, cons, or some of the issues that might be being dealt with? Or is it a dead issue? I guess that would be the first question.

The Chair: For the record, please identify yourself again.

Mr. Gérald Lalonde (Senior Chief, Tax Legislation Division, Tax Policy Branch, Department of Finance): I'm Gérald Lalonde, senior chief, tax legislation division, Department of Finance.

The Chair: Thank you.

Mr. Gérald Lalonde: Thank you, Roy. When this measure was first introduced several years ago, it was a trial balloon, if you will, to see how this would work. The department wanted to get some experience with the measure. Over the last few years, we have seen that there has been increased donations of publicly listed securities to public charities, and in the context of public charities, the government can be fairly comfortable about where these donations are eventually going to find themselves, and in particular, that they won't find themselves back directly or indirectly benefiting the donor.

In the context of private foundations, while that is unlikely to happen, the close nexus between some donors and private foundations can give rise to situations of conflict of interest. In the past, there have been some tax cases--mind you, limited--where there has been some abuse of the charitable donations credit in that respect. So when this was put in, it was designed to be constrained in such a way that, for sure, the pilot project would be one in which we would see the most benefit.

The department has received representations from private foundations, and as you indicated, we are continuing to look at that, but we want to be very careful. We don't want to create a measure that, with one extension of it, casts a bad image on the whole thing. We want to make sure the measure is put in place in such a way that all Canadians can be pleased with the results.

Á (1100)

Mr. Roy Cullen: Do I have time for one more quick question, Madam Chair?

The Chair: Very quick.

Mr. Roy Cullen: Maybe just to make a statement, with respect to the Africa fund.... John Williams has just come in here briefly, and he and I were over in Nairobi and Africa recently. I know it's something we talked about and are conscious of, that our government doesn't support regimes that are corrupt, but there are a lot of people now in Africa basically encouraging that the western world should not be supporting those regimes that are corrupt, and frankly, I'm sure the taxpayers in my riding would say they're not happy sending a dollar to Kenya and having 40¢ of it end up in a Swiss bank account.

So I would just encourage us to be very diligent that we support regimes that have committed to a market economy, to democratic principles, and to good governance. I know that's what we say, and I think in large part we're doing it, but I think it's absolutely important and imperative that we follow through on that.

Thank you.

The Chair: Mr. Brison.

Mr. Scott Brison: Thank you very much to all of you for being here with us today.

My first question, perhaps to the gentlemen here, is with regard to the capital gains tax on gifts of publicly listed securities. The success of that trial balloon, as you describe it, has been extraordinary in terms of the increase in contributions to charities, to hospital foundations, and to university endowments. In the U.S., there's no capital gains tax on gifts of publicly listed securities, nor is there in the U.K.

Given the success of that trial balloon, why didn't we just get rid of the capital gains tax on gifts of publicly listed securities? The cost would really not be that great, and the benefit side to our philanthropic sector and our volunteer sector would have been extraordinary.

Mr. Gérald Lalonde: I think one has to look to the basic policy behind the charitable donations credit. If you look at the garden variety deductions, you or I earn our income and we make a charitable donation. The effect of the charitable donations credit is to ensure...maybe I should step back one step.

You'll recall before the credit was introduced it was a deduction that you were allowed. The effect of the charitable donations deduction at the time was to ensure one did not pay tax on income that one in turn turned over to a charity. That's not a startling proposition, and it seems to be quite fair.

That was changed in 1987, effective 1988, to introduce a charitable donations tax credit that provided a credit at the top marginal tax rate in respect of charitable donations. So, for example, if you were in the middle or the lower bracket and you made a charitable donation, you actually received more in tax credit than the tax you would have had to pay on the income you gave up. Effectively, what that means is the tax credit served not only to eliminate the tax on the funds you donated, but also to eliminate some of the tax on other funds.

With the halving of the inclusion rate for capital gains, the effect of that was to provide at least double the assistance. That is to say, you would not only not pay tax on the income that arose because of the capital gain, because it would be offset by the credit, but an equivalent amount of other income would be also excused from taxes as a result of the operation of the credit.

So one has to ask oneself how far do you go in recognizing the philanthropic intent behind a gift? Not only is the tax relieved on all of the income that arises as a result of making the gift, but it also relieves tax on an equivalent amount of other income. And one gets to the point eventually where the tax assistance in respect of a gift approaches what it would cost the government to actually outright purchase the--

Mr. Scott Brison: But at the end of the day, we have still put our Canadian universities and hospital foundations at a disadvantage compared to their U.S. counterparts with which they have to compete, particularly if we look at our universities, because at the end of the day, we still tax those who want to give gifts of publicly listed securities, in terms of the capital gains, and it's not done in the U.S.

Yesterday we learned that in a nation where there's virtually no competition in terms of our airline industry, there was no impact analysis done on the competitive landscape of the air security tax, despite the fact that the minister has stated publicly he wants a more competitive landscape.

Has there been an analysis of the regional impact of the air security tax? I'm thinking particularly of the Atlantic region--from an economic development perspective, that clearly would be important to know--and more specifically, some of the marginally profitable, or even unprofitable, airports that exist in communities across Canada. There are a great number of them in Atlantic Canada. Whether you're thinking of Charlottetown, Corner Brook, Saint John, Moncton, or Sydney, these are airports that are having very difficult times. What was the degree to which you did an impact analysis?

Á (1105)

Mr. Serge Dupont: Just to comment briefly on the issue of the competitive landscape, quite clearly, there are a myriad of factors--regulatory, legislative, and market--that will impact on the competitive landscape, and the security charge, of course, is only one of those many factors.

Mr. Scott Brison: Did you ask the Competition Bureau to do a pre-ruling on this, in terms of its impact?

Mr. Serge Dupont: No, we did not.

I guess yesterday we heard a fair amount about WestJet, which is a very interesting and successful model. As best we can tell, it is also quite a robust model. It is the model right now, not only in Canada but in North America and around the world, that is the most successful. It is growing the fastest and is seemingly having the best operating margins, based on analyses from specialists in the industry.

In fact--and I just provide this as an element of information--since the announcement of the budget--and of course markets and financial analysts have had time to absorb or at least reflect on the impact of the charge and so forth--we have seen, from WestJet in particular, announcement of new services, which is good news; announcement of acquisition of new aircraft, which is good news; and acceleration of acquisitions of aircraft, which is also good news. If one looks at the share price as a gauge of how markets generally view the prospects of WestJet, having again reflected on any impact the charge may have, the share price since December 10 has risen by 40%.

Mr. Scott Brison: But you've also seen, during that same period, Royal and Canada 3000 encountering significant difficulties in raising financing to compete with Air Canada. That's partially because of the expansion of Tango, pre-emptively designed to screw any potential competitors before they even get off the ground.

Mr. Serge Dupont: I was commenting on developments since the tabling of the budget. I guess some of the developments you're referring to preceded the budget. I'm simply commenting on the fact that if the charge is going to create an insurmountable obstacle for WestJet, in its seemingly very successful quest at the moment to offer new services and compete with Air Canada, there certainly is no evidence that the financial markets seem to ascribe a lot of weight to that proposition.

Mr. Scott Brison: So you're saying that despite the fact that the security fee represents a significantly higher percentage of the ticket costs, you do not believe the discount air travellers, or those airlines, are going to be dealt a disproportionately severe blow by these charges. You do not see it that way at all.

Mr. Serge Dupont: If one does the mathematics relating the charge to the cost of travel on a discount carrier, as opposed to a full-cost carrier, one clearly gets to a higher percentage for the discount carrier. I'm not going to dispute that fact.

I guess the minister was saying yesterday that the flat charge has the two virtues of simplicity and basic fairness, because the security service would not be demonstrably different, based on the amount of the fare.

Á (1110)

Mr. Scott Brison: But the challenge in Canada is that our most vulnerable sector is quite possibly the airline industry. Shouldn't we be trying to find whatever way we can to strengthen that sector and increase levels of competition, as opposed to actually putting a disproportionate burden on some of the competitors and in many ways, as was mentioned earlier, strengthening the position of Air Canada when the industry is struggling?

You can't say unequivocally, and I can't say absolutely, what the impact will be, but why didn't you study it so we could have some type of analysis pre-emptively, before we take this very important step that could further reduce the options available to Canadian air travellers?

Mr. Serge Dupont: I would just comment very briefly that if one were to take any percentage charge to generate the same amount of revenue--to address the type of issue you are raising--one would get to a lower charge for some travellers, but by definition, if some travellers got a lower charge, others would pay a higher charge. That would affect not only business people flying on very expensive international flights. There are also a number of regional flights that tend to be reasonably expensive, and they would be more expensive under a percentage charge, as opposed to a flat charge.

The Chair: Thank you.

Mr. Murphy, please.

Mr. Shawn Murphy: Thank you very much, Madam Chairman.

My question is to Mr. Dupont, and it regards the $24 fee. I want to preface my remarks by saying I don't have a problem with the whole concept of user fees. If the benefit does not flow to the general public, I don't have any difficulty with government policy putting that cost to the person who gets the benefit. However, I have a number of points on your analysis here, and I'll raise five or six of them. I don't think the Department of Finance has made a case to justify this fee and the amount of the fee.

First of all, you've given an analysis of the connecting flights. But all this information would be available from IATA. Is that available? Can you give us exactly what the analysis is as to the connecting flights?

My second point is that you've factored in a reduction caused by September 11. Now we're six months post-September 11, so that reduction would be known now. Could you tell us what factor you've used? I understand you used 10%. Is that an actual figure? Is it justifiable? I don't think it is.

Third, to do this correctly and to have some legitimacy to it, you have to factor in air cargo. Air cargo, I understand, is moved mainly from Toronto to Mirabel, Calgary to Vancouver, and it doesn't move from airports like Fredericton, Regina, and the smaller airports. So you're going to have to explain to this committee what costs are being borne by the entire air cargo industry.

Again, it's my understanding that with a lot of the equipment that this fee is being used to purchase, there's a two-year backlog. Even if you order it today, you're not going to get it for two years. So you're going to have to explain to the committee, on a cashflow basis, how this whole.... You're collecting around $2.5 billion, and your own analysis indicates that you're spending $2.2 billion, but I'd want a detailed cashflow analysis as to when the money is being spent and how it's being spent. You already explained yesterday that you're not capitalizing any of these purchases. If you buy a piece of equipment that's half a billion dollars, you expense it the year it's paid, and that's unfair. But again, I don't want to get into that.

I'll just give an example, sir, of what's going on. I did a quick analysis on an airport like Fredericton. It doesn't have air cargo. It probably has an operating budget of about $1.3 million, $1.4 million, or $1.5 million. Most of its flights go through Montreal to Toronto. You're collecting $2,455,000 from this fee. I don't think you can justify to the Canadian public that amount of money from that community for this service.

Perhaps I'll ask you to explain some of those points.

Mr. Serge Dupont: I'd be happy to.

Regarding connecting flights, to my knowledge--and there's a gentleman here from Transport Canada who could provide supplementary information, if you wish--there is no current data from IATA, or indeed from Statistics Canada, on connecting flights. What is available is the type of data you were referring to yesterday, which is the emplanements and deplanements.

Mr. Shawn Murphy: You're just guessing?

Mr. Serge Dupont: Not quite guessing, sir. We actually had to go back to the former model that was used for the air transportation tax, which, as I mentioned to you, was phased out in 1997. That model at the time proved to be very accurate and very reliable.

Now, obviously one has to think that since 1997 there have been changes in the industry and that perhaps those numbers aren't quite accurate, and we fully acknowledge that. As I mentioned yesterday, it is certainly one of the reasons why the minister is interested in reviewing the charge as soon as we have revenue flowing in and we're better able to assess what is actually generated by the charge. But essentially the data that was used was data that was collected at the time of the former air transportation tax and updated to reflect the number of emplanements and deplanements as they are today.

With regard to reduction of September 11, the figure of 10% reflects what would be average 2002 versus average 2001, which if one were to work it out means that you had a big drop in September, October, and November of 2001. It's starting to pick up, but you're entering into 2002 at a lower level than you were entering into 2001. If you wanted to work it out, you'd find that 10% is not a bad approximation. We're not saying that this is extremely sophisticated science in getting to this number, but we think it's a reasonable ballpark estimate.

Again, the situation going back to December is still of considerable uncertainty in the industry and is why the minister is very much interested, as soon as we have a sufficient number of months with revenue to come in and to see exactly what is generated, to review the amount of the charge.

On air cargo, I would let my colleague speak to what would be done on the security side. I will simply confirm what I mentioned yesterday: there is no charge applying to air cargo in this bill, in this package. On the security side, I will let Mr. Elliott comment, and the same for number four of your question.

With regard to Fredericton, I think that too--some of the regional impacts, airport by airport, what is happening with the charge as it's implemented--will certainly be looked at very carefully. I think we were dealing in December with a situation of considerable uncertainty, with the government feeling it was important to move decisively on air security and to collect from travellers the amount of the expenditures over the five years. But I cannot tell you that this is what's happening in Fredericton and what the direct impacts may be. I think I mentioned earlier that one would have to take into account both the security side and the charge side in order to get the full picture.

Á (1115)

The Chair: I'm going to go to Mr. Elliott to answer that question, then I'm going to go to Mr. Epp and Mr. Thompson. Then that will end our discussion here.

Go ahead, Mr. Elliott.

Mr. William Elliott: I believe, Madam Chair, the honourable member asked about the availability of equipment.

Certainly there is a very dramatically increased demand for screening equipment, particularly in relation to the screening for explosives. There are efforts under way with manufacturers to accelerate the availability of equipment. Some equipment was already purchased, as announced by the Minister of Transport, in October, I believe.

I would say we share the concern about the availability of equipment, but we are encouraged by the steps being taken, in cooperation with industry, to make equipment available.

The Chair: Thank you.

Mr. Epp, please.

Mr. Ken Epp: Thank you, Madam Chair.

I have a concern about the inputs you got in making your recommendation to the finance minister prior to the budget.

Yesterday, when he was here in committee, the representative from WestJet, Mr. Hill, indicated that he had not been contacted, and yet you said he was contacted. So I would like to know if you can tell me exactly when WestJet was contacted and by what means.

Mr. Serge Dupont: I mentioned yesterday that it was after the budget, I think. If not, I would like to clarify that, because it was after the budget that Mr. Clive Beddoe, in December, met with senior officials of the Department of Finance.

Á (1120)

Mr. Ken Epp: Was that at his request at that time? Was it a result of having read the budget?

Mr. Serge Dupont: It was at his request further to discussion with the minister.

Mr. Ken Epp: In other words, your implication yesterday that the contacts with the airlines had been made before the budget recommendation was inaccurate.

Mr. Serge Dupont: I stand to be corrected, sir. I certainly did not wish to imply yesterday that contacts were held before the tabling of the budget. I indicated that there had been discussions with WestJet after the budget, which is what I'm confirming today. I apologize if there was anything unclear in my remarks yesterday.

Mr. Ken Epp: In other words, you're saying now that, unequivocally, WestJet was not contacted before the budget tabling.

Mr. Serge Dupont: Correct.

Mr. Ken Epp: Was Air Canada contacted before the budget tabling?

Mr. Serge Dupont: No, sir.

Mr. Ken Epp: So none of them were.

Mr. Serge Dupont: Certainly not by the Department of Finance on this issue.

Mr. Ken Epp: I understood yesterday that you had contacted Air Canada and WestJet and....

Mr. Serge Dupont: No, sir. I indicated a meeting with WestJet further to the budget. I also indicated--if I have not, I certainly can indicate--a number of consultations with the Air Transport Association of Canada, including its different members from Air Canada, Bearskin Airlines, First Air, and others since the tabling of the budget, indeed to work with them on various aspects of the charge--the various technical matters--and I think in a very constructive relationship with them.

Mr. Ken Epp: I have a follow-up question to that. It has become quite apparent to me--and I'm one of the members who has been here throughout this very thorough two-day hearing on this major bill--that the impact to the air industry, especially the competitors to Air Canada, is going to be rather immense from this.

I listened to the witnesses we had yesterday. Also we've had some correspondence from some other individuals on this matter. From what they have said, their argument is very reasonable.

I'm wondering whether you would be prepared to actually undertake and study this, because I don't think you have. You haven't actually asked what the implication is to people--ordinary common folk who pay $89 to go from Grande Prairie to Edmonton. What is the implication of that if now they're going to have to add $24 to the price of their travel, because they're coming back again too? What is the implication of that?

The implication, it seems to me, is that the service there is going to be cut back. People are going to lose their jobs. There is a potential of a number of local airport authorities running into huge financial difficulty, because for a small airport a relatively small impact could in fact be half of their total income.

Some of these, particularly some of the airports that I know of there, have undertaken a cost--sometimes financing for the future--in the anticipation that this service was going to continue and probably grow. Now it's going to be killed, so those airport authorities are going to go under. I think those things need to be factored into a decision to have a head tax on travellers.

For the benefit of the other members on the committee--I might as well say it now--I'm also not at all convinced that a user fee is appropriate because only airline passengers benefit from this security. I think it's just the opposite. On September 11, the majority of people killed were not on airplanes.

It's a public interest to have safety in the air. As I also said earlier, a cargo plane can go into a building just as easily as a passenger plane. That is in the public interest.

I think the whole premise.... As Herb Gray used to say, I reject the premise of the argument. I reject the assumptions that you've made in coming up with this.

I would like to see, Madam Chair, that we not bring this bill back unamended unless we have some indication--some actual hard data from Finance--that these studies have been conducted and the results are conclusive. And I don't believe they will be.

Á (1125)

The Chair: Mr. Dupont, a very short comment.

Mr. Serge Dupont: Very short, Madam Chair. I would like to pick up on the last point.

You mentioned all of it being picked up by air travellers. I think it's very important that out of the $7.7 billion package for security we're just trying to keep terrorists out and trying to keep borders open and efficient. The broader expenditures and the broader effort is of benefit to the airlines, which are obviously quite vulnerable to the overall security situation. There is a broader package of measures. Those expenditures are directly related to the security of passengers and are being recouped through the user charge.

Mr. Ken Epp: The $7.7 billion is over five years, though, right?

Mr. Serge Dupont: That's correct, and the same thing for the $2.2 billion as well.

The Chair: Are we finished now? Thank you.

Mr. Tonks.

Mr. Alan Tonks (York South--Weston, Lib.): Thank you, Madam Chair.

I'd like to follow up on the issue that was raised by Mr. Cullen with respect to the infrastructure foundation. When the original recommendation or consideration was made with respect to establishing a foundation, was there an advantage in taking the route that would provide incentives to access capital pools such as pension funds and so on that in fact would bring a higher private sector involvement through those pools that would multiply the funds that might be available through publicly provided infrastructure funds? Was the concept of a foundation an accelerant to that concept?

Mr. Jacques Parent: I don't think so, not on this aspect. The program we're setting up right now is providing a place to have the private sector as a partner in those projects. And the way the foundation was to be set up, it was not allowed to receive any other money except from the federal government. So it would engage in private partnership too but through cost sharing with the province and the private sector, and that's exactly what we want to promote in this program too.

Mr. Alan Tonks: I see, so the private-public sector concept is more on a project-by-project basis.

Mr. Jacques Parent: Yes.

Mr. Alan Tonks: And there are no tax incentives that have been considered with respect to encouraging those kinds of partnerships in housing starts and in strategic infrastructure programs?

Mr. Jacques Parent: Not to my knowledge.

Mr. Alan Tonks: Is there any work being done in that area? Have we looked at the super build concept with respect to the kinds of incentives that are built in that and other, say, provincial best practices, if they exist?

Mr. Serge Dupont: I would not be in a position, unfortunately, to answer the question, not being a person who would have authority or responsibility over those matters. I'd be happy to convey your questions to my colleagues in the Department of Finance to know what type of work is being done on those issues.

Mr. Alan Tonks: Or through Mr. Manley and his secretariat.

That's fine. Thank you.

The Chair: We're going to adjourn for a couple of minutes to let the clerks put the amendments in order and we'll come back in ten minutes with all the officials for clause-by-clause.

We are adjourned to the call of the chair.

Á (1128)

Á (1154)

The Chair: We've just been handed an additional number of amendments from the official opposition, which we didn't have, so we will just have to wait until those get photocopied and added in.

This room is now available until 3 o'clock and I--

An hon. member: Madam Chair, are we in session now?

The Chair: No, we're waiting for all the materials to be gathered and photocopied so that the clerks can put them in order.

Â (1200)

Mr. Lorne Nystrom: I also have a bit of a problem, Brian, getting the amendments at the very last minute. We just had a witness this morning, and there are a couple of amendments that should be moved to test the committee on what the steelworkers said. I wasn't totally sure what they were going to say until this morning. I know we've had informal conversations. They didn't have wording with them.

I'm trying to get legislative counsel now to draft some amendments, and he's overworked. At least he was in the room a few minutes ago and I have his phone number, but this is really one hell of a rush. I think we should delay this for a few days so that we can do it properly. That would expedite the thing in the long run, so we don't get into a long, dragged out filibuster, and that could always happen. This thing can go through very quickly if we do it properly.

The Chair: Maybe I can expedite matters here. We had one pile of amendments, and we would have been ready to go right now if that was the only pile.

I understand the position of my colleagues around this table. I think the most fair thing to do is if we can have an agreement to start clause-by-clause Tuesday morning at 9:30. We'll get everybody's amendments in and we'll start clause-by-clause Tuesday morning at 9:30.

Yes?

Mr. Jason Kenney (Calgary Southeast, Canadian Alliance): Madam Chair, I appreciate your effort to allow us to be more deliberative about the amendments. However, yesterday at committee I raised the fact that we'd submitted to the clerk the names of six other witnesses. That number is not unreasonable and not submitted for dilatory purposes. We were able to hear from only one.

I think the clerk has shown due diligence in contacting those important prospective witnesses, but they're across the country, and with one day's notice they simply did not have the ability to respond, in some instances, or to be here within one or two days of being notified.

Given the very grave reservations expressed at this committee by the only two industry voices we've heard from, on a measure that will severely impact a particular industry, I submit that this committee would only be doing its job as a deliberative body to hear from more of those witnesses, if they can make it, perhaps Monday or Tuesday morning of next week. If we could give one more opportunity to witnesses to appear before us, with at least 48 hours' notice, I think that would only be reasonable.

Again, we are not submitting dozens of witnesses. We're not being dilatory about this. We're simply trying to ensure that all those this bill will impact in a very substantial way will have an opportunity to detail their concerns before the committee prior to our going to clause-by-clause.

Â (1205)

The Chair: Mr. Valeri, please.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Madam Chair.

It's my understanding that in fact there was a consensus by committee members to proceed on clause-by-clause today. I'm not sure whether Mr. Kenney was here when the clerk indicated that he had contacted the witnesses, and the witnesses basically said they did not want to attend. So it's not a matter of them not being able to attend. Perhaps we can get some clarification there.

Second, I want to make the point that I sense there's a feeling of finality among members opposite when it comes to the issue of clause-by-clause here at committee. There is an opportunity to continue this debate at report stage in the House. This is not the end of the day with this particular bill. I know the members opposite are quite capable of tabling a number of amendments in the House. Even if legislative counsel is not available at the moment, I know they go to great lengths to ensure that everybody has the opportunity to put forward amendments as they would like. Certainly we could deal with it at report stage.

So I don't want people to think that somehow moving on clause-by-clause today, with the amendments in front of us, and perhaps continuing and finishing clause-by-clause, would in some way impede any member's ability to continue to amend this bill when it gets back to the House.

The Chair: Yes.

I've just received the first set of amendments from the official opposition, and there is one more package coming to us. So perhaps they're working a lot faster than.... They're working very fast, actually, and that's very good.

Just going by my speaker's list, it's Mr. Wilfert and then Mr. Epp.

Mr. Bryon Wilfert: I guess I'll just echo the comments of my colleague on the fact that there was consensus.

As well, as I presume you know, Madam Chair, this is a time-sensitive bill.

The Chair: Yes.

Mr. Bryon Wilfert: I think everyone is aware of that. As I say, we should be able to deal with clause-by-clause and look at the amendments. People have already had some of them in front of them, and as for the others, I don't think they're so lengthy that we can't look at them and ask the appropriate questions if in fact any issue comes up with regard to impact.

The Chair: Please.

Mr. Ken Epp: I have a couple of points to make.

First of all, with respect to making amendments in the House, as Mr. Valeri mentioned, we are now somewhat restricted in that, because the Speaker is ruling amendments out of order if they could have and should have been made in committee. If we could somehow get a commitment that says hey, we didn't have time to make them in committee, so that they would then be permitted in the House, that would perhaps change that. But we're under that new constraint in terms of proposing amendments.

Secondly, I seriously questioned the consensus that we would be at clause-by-clause today. I think we sort of shook our heads--how fast can this be? I don't think this constituted consensus; it may not even be on the record.

Furthermore, I think at the time we were talking, we had assumed that the witnesses we had called for would be here. I believe--it's only a belief; I'm surmising this--that one of the reasons these witnesses did not appear was because when phoned at 4 p.m. and asked “Can you be here tomorrow at 9 a.m.?”, the answer was “No, I can't”.

That may not be accurate, and I would stand to be corrected. But I have not had a chance to contact these individuals to find out the reason. If it's time only, I think we do them a disservice.

Remember, as members of Parliament, at least in my view, our objective is on behalf of Canadian people to pass the best possible laws. If we are not going to listen to witnesses and put forward their well-reasoned, well-argued arguments in forms of amendments to improve the law, then we might as well just have a rubber-stamp committee, let the people out in Canada know that, and then maybe 25% of them will come to vote instead of 50%.

I'm somewhat disillusioned about this process. I would much rather be thorough than fast.

Â (1210)

The Chair: Mr. Wilfert.

Mr. Bryon Wilfert: Madam Chair, could I ask, through you to the clerk, for clarification on the issue of the witnesses, whether or not you have a lineup of people still wanting to come? What is the issue here? Clearly, Mr. Epp's recollection seems to be different from that of some of my colleagues on this side of the room.

The Clerk: I can perhaps repeat what I stated earlier in the meeting. There were six witnesses who were invited to appear before the committee.

Mr. Ken Epp: When were they invited? Can you give us some details?

The Clerk: Absolutely. The six witnesses were approved on Tuesday morning. I contacted all of them immediately after the meeting on Tuesday, which was around 11 a.m.

Two of them agreed, which we've heard--WestJet and ATAC. Two others were contacted. In the case of First Air, I spoke to the president, Mr. Davis, informed him of the invitation, and he simply stated he would be contacting me later. I've not heard from him since.

I also spoke to Mr. Raynor from the Canadian Airports Council. Mr. Raynor indicated he was not available to come on Thursday. I do not know if he would be available to come at a later date. I did not explore that with him.

The Canadian Tourism Commission declined the invitation.

Mr. Ken Epp: They said they wouldn't come?

The Clerk: That's right, they said they would not come. They did suggest that the Tourism Industry Association of Canada might be interested. So I spoke with one of their representatives. They would have been able to appear on Thursday afternoon, possibly, but they were not available to come this morning. They did, however, send a written submission, which I forwarded by fax last night to all members of the committee.

Air Canada I spoke about. They did at one point mention they might be interested in appearing, but have since decided they would not be appearing and would not be submitting a written brief.

I think I've covered all the witnesses.

I left a message for Mr. Vaillancourt of Provincial Airlines at about 11 a.m., after the meeting on Tuesday, and I haven't heard back from him.

Mr. Ken Epp: Did your message say “Can you be here tomorrow?”, in which case he just said forget it, or did you say--

The Clerk: I didn't speak to him personally.

Mr. Ken Epp: But you left a message on his machine.

The Clerk: No, actually I spoke to someone from Provincial Airlines.

Mr. Ken Epp: What I'm concerned about--

The Chair: I think, Mr. Epp, our clerk has already put on the record twice that he's contacted the witnesses, or that we've attempted to do so. There could be more witnesses. They could be calling as we speak, for all we know, and there could be more next week. But this is a budget bill that we've had witnesses on. Last week we didn't have hearings, and people could prepare for this week. But here we are today, and I've called clause-by-clause because all of this committee--and I remind you that you were there with Mr. Solberg--talked about contacting those witnesses, getting the officials here, and going to clause-by-clause on Thursday.

That is what was said. Then we talked about next week doing a private member's bill. That's on the record also. Then we talked about setting up a steering committee, which I think we're going to have to do. We'll have to look at the rules to set that up.

I know this committee hasn't had the same types of rules other committees have had. Perhaps we can revisit that very shortly and get some order. It's been an unusual committee in the past--and I've served on it--and I think it would be helpful to have the order. The bottom line is we could be hearing witnesses for a long time, and there will always be more witnesses to hear from. There is time sensitivity to this bill. I think it's a situation right now that we're talking about going into clause-by-clause.

We have called for clause-by-clause. I put the notice out pursuant to the direction of everybody around this table on Tuesday. Every party was in the room when that decision was taken.

What we're into now is having a discussion about witnesses when actually the discussion, I believe, is to be focused on clause-by-clause. So I direct us back to when you wish to do clause-by-clause, because I think that is the real topic of discussion here.

Â (1215)

Mr. Bryon Wilfert: I would suggest, Madam Chair, with all due respect, that the clerk has made things very clear with regard to witnesses. We even had a written submission, which did not preclude anyone else from sending written submissions if they could not attend.

This meeting, therefore, has been duly called and constituted to deal with clause-by-clause. I suggest we start.

Mr. Jason Kenney: Madam Chair, Mr. Wilfert has had three interventions; could I just have a brief intervention?

The Chair: Mr. Kenney, go ahead.

Mr. Jason Kenney: Madam Chair, first of all, I think he draws precisely the wrong inference from the clerk's second reprise of contacting witnesses, which is that at least two, possibly three, of those witnesses would have been interested and available, but not with the very limited time permitted.

My second point is this, Madam Chair. This is a multi-party Parliament, and I understand that the government wants to expedite this legislation. But Mr. Wilfert and Mr. Valeri should understand that this is a two-way street, and when the opposition feels that a committee or the House is not operating in an appropriately deliberative fashion.... We're not talking about an infinite number of witnesses; we're not talking about drawing out clause-by-clause for days. We're talking about a couple of days in the parliamentary calendar, and we're talking about a couple of hours of additional prospective witnesses.

Let me be very clear and on the record that if the opposition doesn't see a willingness to allow a modicum of deliberation at this committee, then you can be guaranteed we'll be taking a lot longer than we otherwise would.

The opposition has very few tools at its disposal to slow down legislation, but we'll start using them in a few minutes to turn what could be a one- or two-hour process into a several-day process here and in the House, unless we see some willingness to have a modicum of deliberation.

That's all we're asking for. We don't want to string this out for weeks, or even a week, or even several hours. We just want a couple of more witnesses who might be able to make it early next week and proper time to study these amendments and to prepare our amendments, and if we don't have that then we're going to use the dilatory tactics at our disposal, which I don't particularly want to do. I think this is ridiculous.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Thank you, Madam Chair.

While I appreciate the time sensitivity of this legislation, you yourself suggested maybe we could move to clause-by-clause on Tuesday. I think Mr. Kenney had said maybe there was a possibility of having the witnesses, let's say, on Monday and going into clause-by-clause Tuesday.

In terms of the time sensitivity of the bill, does that create some enormous problems for the government, or why can't we do that?

The Chair: I'm not the government; I'm the chair of this committee. What I was giving you was some timeframes that I thought were reasonable here. I think everybody around this table appreciates that the security measures in this bill are time-sensitive, and the budget is time-sensitive, always. I do not speak for the government as chair of this committee.

Mr. Nystrom.

Mr. Lorne Nystrom: Maybe I can make another suggestion that might fit in with both what you and Roy are saying.

What about hearing some more witnesses if they wanted to come on Tuesday morning and starting clause-by-clause Tuesday afternoon? I've been trying to get legal counsel, for example, to draft a couple of amendments coming out of the steelworker presentation this morning, and Tony is aware of what they want. It's noon hour, and some people are away. Unless we have a special agreement to set aside those possible amendments until Tuesday, then I don't want to proceed.

I don't want to get into a filibuster on this stuff. I could talk for hours and hours on every single amendment and clause coming up. I don't want to do that.

The Chair: I understand.

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Mr. Lorne Nystrom: I'm going to make the suggestion that we hear witnesses on Tuesday morning and start clause-by-clause on Tuesday afternoon. I haven't had a chance to consult with Jason. I'm sorry.

That's just another suggestion on the table that might be a bit of a compromise.

The Chair: Mr. Wilfert.

Mr. Bryon Wilfert: Madam Chair, I'd be amenable if we could get the witnesses here on Monday and deal with the clause-by-clause on Tuesday. But I do not want to have a situation, with all due respect to my colleague across the way, where he then suggests on Monday that so and so couldn't show up until Tuesday, so he's not going to deal with this until Tuesday.

If we have an agreement from all concerned.... I'm always looking for helpful suggestions. If in fact you want to be helpful, Mr. Kenney, and you'd like to suggest that on Monday we can have the witnesses here, and if they can't be here they would send written submissions, I'm quite amenable to that, with the proviso that on Tuesday we deal with it in clause-by-clause.

The Chair: Ms. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): I agree. I think it looks bad on the process to hear witnesses in the morning and go immediately to clause-by-clause when the opposition or anybody doesn't have an opportunity to do amendments. I think it would be much better that Monday.... Then you've got the evening to do amendments if you want, rather than what we've heard from your concern about the steelworkers and the potential amendments from that. So I would rather....

The Chair: Mr. Tonks.

Mr. Alan Tonks: Could we have a time for the submission of amendments, a drop-dead time past which they would not be submitted? If you're going to hear witnesses on the Monday, could we not say that by a certain time in the evening those amendments have been presented so they can be duplicated and distributed and we have a chance to see them?

The Chair: I'm beginning to hear a consensus around the room. I'm doing this because as a new chair of this committee who wants to be fair to all sides and to play by the rules, I am going to insist on fairness to everybody. I was elected eleven to four in this room. Last night I had a challenge after the adjournment. I'm very pleased that didn't recur this morning.

I think this committee has worked. We have important legislation, so we're not wasting our time on those things. I would like to see the productive work on this legislation. I could easily be here on Monday to hear witnesses, if that is a situation for Monday to hear witnesses, so we could start clause-by-clause on Tuesday, if that's the consensus I've heard. I don't think that's going to make too great a difference. But let's be clear. I am listening to my colleague from the NDP, who has made the point about legislative drafting, and I understand that. I'm listening to my colleague from the Conservative Party, and I think this is the way in which I'm seeing his view go.

Madam Picard, you sat here the other day and pledged your cooperation, and I hold you to that, because I think what we're trying to do here is get through the budget.

Mr. Valeri.

Mr. Tony Valeri: I think I could certainly support.... I take what Mr. Kenney is saying and certainly what Lorne is saying as very valid. I think in the spirit of cooperation, everyone is certainly amenable to that. I just wanted to deal with the other end of this.

People are talking about hearing witnesses on Monday and starting clause-by-clause on Tuesday. I think it would be very helpful if we had an understanding that if we started clause-by-clause on Tuesday, in the spirit of cooperation we really wouldn't get into a lot of dilatory measures, that we could actually deal with clause-by-clause on Tuesday so that this piece of legislation can move into the House and that we would complete clause-by-clause on Tuesday.

Mr. Jason Kenney: Madam Chair--

The Chair: Yes, Mr. Kenney.

Mr. Jason Kenney: It's directed at me, so to be clear, I think what both Lorne and I were saying is that if we feel like we're being jammed through this today, we're going to spend hours on this but we don't want to--nobody likes going through that process. It's useless, and we have no intention of doing that if we get serious, substantive amendments before us on Tuesday and if all the witnesses have an opportunity, with reasonable time to present.

That's not a commitment to whip through this in an hour, because there are some major amendments on which we want to spend our time, but nothing dilatory. That's not our intention.

Mr. Tony Valeri: Given that proviso, that on Tuesday we would be able to deal with the clause-by-clause--

Mr. Jason Kenney: Hopefully, it will all be done on Tuesday. I don't know how many amendments there will be, but we don't intend to drag it out unnecessarily.

Mr. Tony Valeri: Yes. I'm sure that people around this table will be prepared to stay as long as it takes. It is an important piece of legislation--and again, in the House, there is often another opportunity to deal with it as well.

So on that basis, I would fully agree with what you've said. I appreciate that.

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The Chair: So I'm hearing witnesses on Monday, and let's be clear about what witnesses we're talking about.

The ones we have contacted already, who couldn't appear on Thursday but were on the original list from the Reform Party, will be given an opportunity to come again Monday morning--or Monday afternoon, I think, would be better--and if they can't make it, they can send a brief if they so desire.

There was one other witness, who the clerk informed me had phoned this morning, but he hasn't had a chance to get back to that witness. That was whom?

The Clerk: The airline pilots.

The Chair: I think they're a witness that it would probably be good to hear from, if they can be here on Monday. Since they've contacted the clerk this morning and he has been busy, I think it would be reasonable to include them.

Do I have agreement on that? So we're all clear; we're going to be here.

I'm going to raise one other procedural point, because if we're going to talk about being dilatory, let's talk about being dilatory. This committee has operated without a motion for notices of motion, and perhaps if we're going to have witnesses, we should have some sort of situation where we're going to hear the witnesses, and not be sidelined by notices of motion or other matters.

So while we're hearing these witnesses on Monday, could there be some sort of procedural thing so we actually get through the witnesses? Does anybody want to pick that?

Yes, Mr. Epp.

Mr. Ken Epp: It's my view, according to our rules, for example, that when we're hearing witnesses, it's not necessary to have quorum in the usual sense of the word, right?

The Chair: Absolutely.

Mr. Ken Epp: It's only required to have, what is it, two or three...? I don't remember the precise rule. Is it three members?

The Chair: It's only three.

Mr. Ken Epp: And at least one from the opposition. I believe that's how it is.

So in that case, pardon me, James, but I think it's out of order to place a motion when we have a business meeting that's precisely for the purpose of hearing witnesses, because it's just unfair to the members on both sides if that type of thing occurs.

The Chair: And unfortunately, Mr. Epp, in the rules of this committee, there are no rules to that effect.

Mr. Ken Epp: I think there are.

The Chair: There is no notice of motion. I've checked the rules of this committee, and you have been operating quite some time without any rules to that effect, that are in most of the other committees.

So perhaps to get some orders, if you want to do it, I could certainly entertain some motion today about just hearing witnesses and with a minimum quorum, or whatever quorum you wish.

Mr. Epp.

Mr. Ken Epp: Again, I would support, then, setting up a rules committee, and then letting a report go quickly to the committee.

The Chair: Yes.

Mr. Bryon Wilfert: Madam Chair, I would suggest that, for another day, we look at the setting up of the steering committee. I think we need to put some rules in place that will benefit all members of this committee, and that we do that as expeditiously as we can. In the meantime, we will hear our witnesses on Monday.

I would also suggest, with all due respect, that we should have a cut-off time for amendments so that we are not placed in the situation again where amendments are dropped at the last minute. So there may be, through you to the clerk, an appropriate timeframe after, that we would then ask members of committee to submit any amendments by the end of the day, or whatever that may be.

The Chair: Mr. Kenney.

Mr. Jason Kenney: Madam Chair, I don't think we have a problem with such a rule in principle, because in fact we're just as much disadvantaged by having received a stack of amendments a few minutes before.

I just want a clear understanding, however, that should legislative counsel be unable to furnish us with draft amendments by such a deadline, there would be no objections raised in the House to bring those forward at report stage, because we are limited to time constraints imposed on us by legislative counsel.

The Chair: Mr. Valeri.

Mr. Tony Valeri: Can I perhaps suggest, Jason, that the House leadership might want to deal with that. It's sort of difficult for us to say there wouldn't be, but maybe we can bring it to our House leadership and they can address that issue. Is that fair?

Mr. Jason Kenney: Yes.

The Chair: Okay, I'm hearing consensus that this committee will get some rules that there will be no motions during hearing of whatever witnesses come on Monday. We will hear witnesses with no shenanigans--I'll call it that--and we'll be there for clause-by-clause at 9:30 a.m. on Tuesday. Is everybody agreed to that?

Yes, Mr. Epp.

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Mr. Ken Epp: Madam Chair, I would go so far as to say we should be in a position right now to strike a subcommittee on rules, which could bring back a report to the committee expeditiously. I would be ready to volunteer for our party.

The Chair: I think I will call a steering committee to discuss that after next week. Okay?

Mr. Ken Epp: Okay.

The Chair: Let's get this legislation through first.

We are adjourned.