Mr. Speaker, I too am pleased to congratulate you on your appointment. I am certain that the House will be enriched by your presence in the Chair.
I also would like to indicate that I will be splitting my time with the hon. member for North Vancouver.
Canada played a leadership role in the negotiation of the convention and protocol which were designed to facilitate the financing of aircraft equipment, airframes, aircraft engines and helicopters.
There was strong support for this project from the provinces, territories, airlines, industry associations and aircraft manufacturers. Canada's active involvement in the negotiation leading up to the adoption of the convention and protocol highlights this country's commitment to seek global solutions to global problems in cooperation with the rest of the international community.
Extensive consultation with interested parties were held throughout the development process. Representatives of the Canadian industry were present and participated in many of the meetings leading up to the diplomatic conference at Cape Town as well as at the meeting that formally adopted the instruments.
Momentum for achieving these instruments grew very strong in early 1999 with negotiations in Rome and Montreal involving Unidroit and ICAO. The convention and protocol were adopted on the last day of the diplomatic conference held in Cape Town, South Africa, from October 29 to November 16, 2001.
The package adopted at Cape Town is rather novel in form. It consists of a convention drafted in general terms and a protocol with rules specific to aircraft equipment that complement and vary the rules of the convention.
To make the instruments more user friendly, the Cape Town conference decided that a consolidated text would be produced and distributed along with the convention and protocol. The consolidated text will be a useful interpretive tool.
Canada signed the convention and protocol on March 31, 2004. To date, 28 countries have signed the instruments and four countries have ratified them. The convention came into force on April 1, 2004, and the protocol will come into effect once eight countries have ratified it.
The United States has passed implementing legislation and the president has senate authorization to ratify the convention and protocol. Other countries can be expected to follow suit once the U.S. ratifies it.
The convention and protocol are the subject of the bill currently being considered. They represent an unparalleled example of cooperation between governments and industry in creating a harmonized international legal regime.
In addition, the International Air Transport Association has indicated that it estimates that the convention and protocol would generate savings of $5 billion for the airline industry.
It seems obvious then that passage of this bill will mark an important stage in the creation of an international system which the aviation industry throughout the world will find highly advantageous.
Mr. Speaker, I will let my previous record stand in terms of congratulations to you.
I am pleased to have this opportunity to discuss the legislative amendments that will come into force upon the ratification of the convention on international interests and mobile equipment, and the protocol to the convention on international interests and mobile equipment on matters specific to aircraft equipment.
Canada is a leader in electronics registries and has one of the most modern asset based financing systems in the world. Canada already has a sophisticated financial regime that uses assets as collateral. However, implementation of the convention and protocol would benefit the aviation industry by amending insolvency legislation and establishing an international registry specifically for aircraft equipment.
The convention and protocol would establish an international registry in which interests in aircraft equipment would be registered. This registry would replace individual national registries. It would record the existence of rights and prospective rights and determine their priority for use in the purchasing and financing of aircraft.
Currently in Canada each province and territory maintains its own aircraft registry and the federal government maintains a registry as mandated by the Bank Act. The establishment of a single worldwide international registry would replace both the federal and provincial registries for aircraft and aircraft parts in Canada, greatly simplifying aircraft registration. This will create a uniform, secure and predictable environment at the international level for Canadian business. This is in line with Canada's goal of achieving enhanced transparency, security and predictability in international business.
The Bank Act's special security regime allows banks in Canada to register security interests on a national basis for certain types of defined products listed in the act. The types of products that can be registered under the Bank Act are technically broad enough to include aircraft equipment covered by the new protocol.
Since the goal of the protocol is to create a single international registry, amendments to the Bank Act would be required to avoid overlap. The most effective means of doing this would be to remove the aircraft equipment from the application of the Bank Act. The international registry would allow aircraft owners, lessors and financial institutions to record their rights, including security interests in aircraft and aircraft engines.
Registration establishes the purchasers' or the creditors' priority over the unregistered or the subsequently registered interests of other parties. Information in the Internet based registry will be available to and accessible by any individual or company directly. This will provide a considerable advantage in terms of time, cost savings and improved certainty in resolving questions of priorities of interests.
Aviareto, an Ireland based company, was selected as registrar to a tendering process supervised by the International Civil Aviation Organization. The establishment of the international registry has begun and Aviareto will operate the registry once the convention and protocol come into force.
Before Canada ratifies the convention and protocol, a careful examination will be done of the final acceptability of the terms of operation of the new international registry. Canada will withhold ratification until it is satisfied that the registry is fully operational and secure. Amendments to the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, and the Winding-Up and Restructuring Act would also be required in order to implement the convention and the protocol.
The bill provides for a special remedy in the case of insolvency that would impose a fixed stay period of 60 days. After this period, creditors could reclaim an aircraft or aircraft equipment on which they have a security. Under current legislation there are various periods within which creditors are subject to a stay on their ability to enforce security interests. These stays can sometimes extend to more than a year. The adoption of a fixed 60 day stay period would increase certainty in the system and level the playing field between Canada and the United States.
The U.S. industry already benefits from a similar provision under the U.S. bankruptcy code. The adoption of consequential amendments to Canada's insolvency laws would benefit Canadian aircraft manufacturers, financiers and airlines at the international level. Although these changes would provide better protection for creditors, they would not materially impact the debtors' ability to pursue reorganizations in the case of insolvency.
The federal legislation required to implement the convention and protocol would make the necessary amendments to the relevant acts. The legislative amendments may be proclaimed into force at different times, but no later than the date on which the convention and the protocol enter into force in Canada.
The establishment of the international registry and the associated harmonized asset based legal regime will significantly reduce the risks associated with aircraft financing. The effect will be a healthier, more stable international aviation industry. Adopting the bill will set in motion the legislative amendments required to achieve the goal.
Mr. Speaker, you will understand that having in my riding the beautiful Mirabel region, home to a fair chunk of the aerospace industry in Quebec, it is a pleasure for me to rise and speak to Bill C-4.
My colleagues have stated the Bloc Québécois's position several times already. We are in favour of the bill entitled: an act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment
We have all understood that the bill is meant to allow bankers to take equipment sold as security. It is true that the industry is facing financing problems and that airlines have difficulty getting the required financing for equipment they sell because buyers, at present, are close to insolvency. All major airlines are seeking protection under the Bankruptcy and Insolvency Act. Some U.S. airlines are considering that protection for the second time. Therefore, this bill is clearly needed.
I repeat the comments I have been making since the beginning of this debate. Once again, I find it rather odd that the Minister of Transport is bringing this legislation before us on its own, without any real plan to revive and relaunch the entire aeronautics and aerospace industry in Canada.
I say that because our companies are under enormous pressure, not only because they have trouble financing themselves, but also because there are many other countries that want to see this industry move to their own territory.
For some weeks, we have been listening to our American neighbours. Three states in the U.S. are ready, on their own, to offer the same amount as the Government of Canada to help Bombardier, among others, launch its complete new aircraft concept, for example.
This is a difficult message for the aeronautics and aerospace industry in Canada. I can give the House a few figures. The United States invests $45 billion per year in aeronautics and aerospace research and development. Some $6.5 billion goes to three companies—Boeing, Raytheon and United Technologies.
In Europe, Airbus receives $3 billion for research and development from various European countries. Here in Canada only $165 million is available, not for Bombardier alone but for the entire aeronautics and aerospace industry.
It should be clear to everyone that this sector is underfunded. Obviously, I have a lot of trouble with that. I will repeat that I come from the Mirabel region. We have heard that men and women who work in this fine industry are going to lose their jobs. Some have already lost them. That is unacceptable.
It is unacceptable when the only action the government is taking is to introduce a bill whose purpose is to have the banks fund this industry. It is as if the Government of Canada said to all industries, “Look here. What we are proposing today is that you go see your bank. The banks will provide financing for your buyers”.
And yet we know that, even if this bill is passed, even if all the countries in the world passed this legislation and an international registry were created, there are not many bankers who would be more interested in taking airplanes as collateral, given the state of this industry throughout the world.
Will it help? Yes, the industry thinks it will; it is asking for this legislation. It has been asking for it for years, and Canada has been waiting for years.
The problem is people are now hitting the panic button. We want a major recovery plan for the aerospace industry throughout Canada. The industry is hitting the button, but obviously, nobody in the federal government is responding. A drama is taking place in the industry. It is a drama, because 55% of all jobs in aerospace are in Quebec.
I repeat that when I started as a member of Parliament in 2000, the Prime Minister, Jean Chrétien, made a declaration, which he repeated during the election campaign. It struck me. Understandably so. Such things are of interest to an MP whose riding includes Mirabel. He said that the aerospace industry was to Quebec what the auto industry was to Ontario. At the time, he pointed out that a little more than 61% of all aerospace jobs were in Quebec.
Unfortunately, since then, we have lost 7% of them. The figures have just come out. The industry prepared an update, and representatives reported it to us last week. The Liberal members refused to meet with them. But the representatives reported that the figure is now 55%. The Liberals are happy that Quebec has 55% of all jobs in this sector, despite the fact that this figure represents a 7% reduction for Quebec. That is the reality.
In my region, as you know, Mirabel is close to Boisbriand. We benefited a little bit from the auto industry. The one remaining auto manufacturing plant in 2000 was there. However, in the past three years, since the statement by the prime minister, the GM plant in Boisbriand has shut down. Before the last election, the Liberals announced a support and recovery program for the auto industry in Ontario. Once again, Quebec and the whole aerospace industry are crying for help, arguing that survival was despite all odds. I am very pleased that it got through the events arising from September 11, 2001. The industry managed to survive. But we are currently witnessing drastic staff cuts and, obviously, fierce competition from the US and other countries in the world. They are prepared to ask our businesses, our Bombardiers of this world, the flagships of Quebec's and Canada's economy, to build a plant there, because they have money for them.
Once again, playing fair, Bombardier asks Canada to tell it promptly what its intentions are before it responds to the offers made elsewhere. Today, in this chamber, we are discussing Bill C-4 on the financing of equipment and the fact of putting the future of Bombardier into the hands of the bankers. Everybody knows that it will help and that we agree with that. The problem, though, is that Canada does not have a relief and recovery plan for the industry.
We have the figures to back up what we are saying, with the analysis provided by the famous Technology Partnerships Canada program for research and development. This program was established in 1996. Believe it or not, not one cent more has been made available since, more or less. Despite the fact that the industry's research and development expenditures increase by 8% per year, the budget for the Technology Partnerships Canada program has not been increased. Why? Assistance is provided to the industry and, under this program established in 1996, royalties are paid. Financial assistance is provided to the industry and, when the industry makes sales, it pays royalties, which are reinvested into the program. The only money available is the money that comes in. Because agreements were signed respecting the development of equipment, be it helicopters or airplanes, throughout the industry, no matter what company, money is coming back. The only new money available is the money that has been put back by the industry since the program was established in 1996.
The industry says that this does not make any sense at a time when competition is becoming ferocious. In the United States, some $45 billion is available, and $3 billion U.S. in Europe. That is how much is available to those competing with our industrial flagships, the likes of Bombardier or Pratt & Whitney, which manufacture all aerospace components in Quebec. The recovery or development plans developed by theses industries cannot be too extensive. Yet, that is what Bombardier wants to do in order to be competitive: introduce an entire line of new aircraft. The first phase of the plan includes research and development, production and construction of new lines.
There is also financing to promote exports. In addition, it is true that the bill will help bankers get guarantees. All countries, however, have funding support programs for equipment.
This has been the object of many debates in recent months. There was the loss of the contract. Air Canada bought some equipment from Embraer. This is how things work: the country where the industry is located, Brazil in the case of Embraer, provides some of the funding required. This is why I said earlier that this bill is good, because it allows bankers to take security. However, the problem is that, right now, bankers in the world do not have confidence in the aerospace industry, and particularly not in buyers. Therefore, governments are forced to provide guarantees.
Currently, Brazil is funding 80% of Embraer's deliveries, while here, the Canadian government is funding only 41% of the deliveries of Regional Jet and Bombardier. So, after the buyer paid a visit to the bank and was told that it could not get help, or that it could but only up to a certain percentage, and as Embraer needed venture capital, it turned to the Brazilian government, which guaranteed the loans. This is of course the system in place. Liquid assets must obviously be protected.
In this regard, Canada's program has not been reviewed. Once again, we are debating a bill that is indeed important and one that the industry has been asking for years. However, it merely delegates to bankers the responsibility for getting the aviation and aerospace industry back on track, but this is not what we need. We need a major federal support program, otherwise, unfortunate as this may sound, the new Bombardier regional jets will be developed in some American states or in other countries.
Of course, when we put questions to him, the Minister of Transport says that we should be realist and respectful of the ability of Canadians to pay. I hope that the minister will also be respectful of the ability of the Brazilians, Americans or Europeans who fund this high tech industry so important to us.
During the last Parliament , I had the opportunity to go with you, Mr. Speaker, to the international show at Le Bourget as the Bloc Québécois representative and transport critic; you too were involved in the transportation file. I was surprised by the eagerness of countries without an aircraft or aerospace industry that would have liked at all cost to attract aerospace manufacturing to their country. Having such an industry is very glamourous for a country. It is high tech at its highest level. This is the reality.
We in Quebec are fortunate to have the second highest concentration of aerospace and aeronautical industries in North America. That is very fortunate. We have the fourth highest concentration of aerospace manufacturing in the world.
Once again the federal government is dragging its feet. However, during the last election campaign, it did not forget to invest to help the automobile industry. It did not forget, and it was done at Quebec's expense. As you know, since the Boisbriand GM plant closed down, no car is manufactured in Quebec although the province is one of the biggest producers of aluminum and magnesium in the world. Some 85 per cent of these metals are used to build automobiles. We are one of the biggest producers of those basic materials. We do not manufacture automobiles and very few car parts because, as you now know, it is all about industrial clusters. When you have an automobile industry, a whole spare part industry gravitates around it. That is what is meant by an industrial cluster.
They set up shop in Quebec. That is what happened with the aviation and aerospace industry, but we are losing ground. I explained it earlier. In 2000, we had 62% of jobs; in 2004 we only have 55%. I repeat we must put money where ideas are. Of course I remember the statement by the then Prime Minister of Canada, which the new Transport Minister has repeated, namely, that the aerospace industry is to Quebec what the automobile industry is to Ontario. However money speaks louder than words. On must be able to invest where needed. A vigorous aerospace industry expansion program is long overdue. Time is of the essence.
Such a program ought to have been tabled simultaneously with Bill C-4. That is what we ought to have been hearing today, speeches in support of the government, as there are for this bill. All parties would have risen to speak in support of a massive renewal effort for the aerospace and aeronautical industry. But it is not there.
When will it be? We have just heard some members tell us that yes, they are working on it. Let them go and talk with the owners of the aviation and aerospace companies and they will see that they know what they want. They could provide you with a draft program in no time. Agreement would not be long in coming.
The problem is that there is no desire on the part of the federal government to create any major revival of this industry. Why not? I would say for political reasons. Of course, there are still bitter feelings toward Quebec. That is the harsh reality, and that is why many Quebeckers feel Canada is not their country and they would be better off on their own.
Once again today we find ourselves faced with the same reality: a federal government that is turning a deaf ear to the demands of an industry that is, once again, concentrated in large part in Quebec, but has lost a lot of ground since 2000.
The Bloc Québécois will do everything in its power in this House to return the aerospace industry to its former status in Quebec, and in Canada of course. We are here to defend the interests of Quebec. We were here, we will continue to be here, and in greater numbers than in 2000. We have many new colleagues with us now to tell this House that Quebec has needs
If Canada cannot give Quebec what it wants, it just needs to let us go. It is as simple as that, no more complex than that. We will take our own tax money and with it will be able of helping these leading lights of our industry. That solution fully respects the interests of each party.
Once again, on behalf of the people of Quebec, I am asking the federal government to waste no time in tabling a recovery plan for the entire aerospace and aeronautical industry across Canada. The entire industry needs help, and so does the part of it that is situated in Quebec.
I will end on that note. Mirabel experienced Liberal-style management. Land was expropriated for the construction of Mirabel airport. That was the approach taken. The dream came true at a cost of displacing more than 3,000 people, the greatest deportation of men and women since the deportation of the Acadians. That is what happened in Mirabel.
An airport was built in the middle of nowhere. I know there is no turning back once the airport is built. The only problem is that the Liberals have never had the courage of their political decisions. It was the Pearson government that decided to put Mirabel airport there. Do not tell me that when the airport was built they did not have plans for autoroutes 13 and 50 and a high-speed train to make it accessible. A station was built under the terminal. Anyone who has followed this file closely, knows it.
The only problem is that the Liberals lacked the political will. Just think back to when the decision was made. Mirabel was built in order to close Dorval and have all flights go through Mirabel. That was the objective, but no highway or railway links were ever built. When there were 75 Liberal MPs in Quebec it was decided that Dorval would stay.
It is time to stop thinking that the Liberals have the answer to everything. When it comes to Mirabel, they caused most of the problems we are having. In my view they have been in power far too long. The Liberals have been in power for 30 of the 40 years since Mirabel was announced. We have seen the results.
We have seen what that did to the automotive industry. GM in Boisbriand is now closed and demolished thanks to the Liberal government. I hope the aviation and aerospace industry will not experience the same fate as Mirabel and GM in Boisbriand. I hope the Liberals will be able to respect Quebeckers for once.
Mr. Speaker, you will understand that it is with barely contained excitement that I join the debate on Bill C-4 which, on the surface, might seem very dry and technical, but still has its romantic side. I will get back to this later on.
Having said that, while we support the bill, as all my predecessors have said, there is nevertheless a certain amount of disappointment . The member for Outremont and Minister of Transport was so outspoken during the electoral campaign. All my colleagues remember this. He said that he would be very vigilant in defending Quebec's interests. Given what the member for Outremont has been saying, we would have expected one or two legislative initiatives before the introduction of Bill C-4.
Not that this bill is not important. I will get back to this. It is a bill to implement international conventions that give loan guarantees and that pertain to a whole series of processes for mortgages, mobile equipment and aircraft registries. We are not saying that it is not important since a number of industrialized countries have signed on to this convention. However, would it not have been more important for this House to deal first with former Bill C-26? Would it not have been more important for the Minister of Transport to take his responsibilities and reintroduce former Bill C-26 that gave the Canadian Transportation Agency--a quasi-judicial administrative tribunal--power to mediate in those cases where the railway companies do not act properly or do not respect the surrounding communities?
I am sure that, through you, we could ask those members who represent ridings where railway companies show no respect for the local communities, making noise and switching engines at all hours of the dayi n a residential area, to raise their hand. In my riding of Hochelaga, on Moreau street, the CP is operating 24/7. I have been told that, in the Lévis area, this very beautiful area of Quebec's national capital, a former mayor has called the Government of Canada on this matter. In Outremont, there is a switching yard. Some of our fellow citizens are being deprived of their quality of life, by a lack of respect, a lack of regulations. When the transportation agency proposed regulations, the CP went to court. As a result, the Federal Court of Appeal brought down a decision, saying that the transportation agency did not have jurisdiction to propose such regulations.
All this to say that, when my amiable colleague from Longueuil and transportation critic spoke this morning, she urged the Minister of Transport to restore former Bill C-26. We need legislation like that, because, in every province, in every community, there are railway companies behaving like barons of industry, interested only in money and with little or no regard for our fellow citizens. When, in a residential area, a person lives next to a railroad track, has to fight with railway companies behaving in an irresponsible fashion, we believe it is the role of this Parliament and of the Minister of Transport to become more vigilant and to introduce a bill to remedy the situation much sooner than they have.
Were we not entitled to expect—we have been talking about it in the Bombardier file—that we would be presented with a policy on aeronautics and aerospace? Every time the federal government prepared to fulfill its responsibilities in the area of transportation, it failed miserably. The oldest members in this House—not in chronological terms, but the oldest politically speaking, those who were here before the June 2004 election—can recall the disaster brought about by the Minister of Transport with his policy of divestment of wharves in smaller ports.
The government wanted to entrust the management of these ports to the communities, but without making the necessary resources available. If it had not been for the members of the Bloc, this file would just about have gone unnoticed by the Quebec Liberal caucus.
People will recall, of course, as the member for d'Argenteuil—Papineau—Mirabel mentioned, the boondoggle created by Pierre Elliott Trudeau. I can think of no other words to describe the white elephant that the whole issue of the Mirabel airport became. It was the kind of anarchic way of doing things that was questioned.
I could also talk about shipping. As you know, I have been the member for Hochelaga since 1993. In the 1980s, not that long ago, shipyards in Canada, in my constituency and in various provinces were closed. I do not know how old you were then, Mr. Speaker, but I am sure you were sufficiently aware and interested in public affairs that you can remember that.
In Hochelaga—Maisonneuve, generations had worked for the MIL Vickers Inc., a shipbuilding industry. In the 1980s, we realized there was a 30% shipping overcapacity throughout the world. The decline in this industry is not due to any lack of vigour on the part of the workforce, but to a lack of will to continue improving our product and technologies. These workers were left to their own resources, and the federal government shunned its responsibilities.
The provinces did take theirs. I remember the excellent government of René Lévesque—and I am talking here with the objectivity I am known for—had already suggested elements of a policy to help workers adjust and move to another career.
I am sure my colleagues remember the Program for Older Worker Adjustment, or POWA, which goes back to the days of Brian Mulroney's Conservatives. The initiator of this program was minister Cadieux. This program had a big flaw. In communities with a population of over 100,000 residents, like Montreal, 100 workers had to be laid off for them to be eligible. We had layoffs in a number of communities, but POWA could not kick in because the number of laid off workers was not high enough.
On several occasions, Bloc Québécois members introduced bills to rectify this situation, but the government never provided any support to get such a bill passed.
This file has been a disaster right from the beginning. The Mirabel file is a disaster too. When it comes to shipyards, the government missed the boat.
I remember the excellent work done by the former member for Lévis-et-Chutes-de-la-Chaudière, whom I can call by name now since he no longer is an MP. I am sure you have fond memories of him too, Mr. Speaker. I am talking about Mr. Antoine Dubé. On several occasions he put forward bills and organized workers to get the federal government to invest in a shipbuilding policy, to help workers at the then Lévis shipyard.
I am sure Mr. Dubé's successor, the member for Lévis—Bellechasse, who, as you know, is a Bloc Québécois members, will keep on urging the federal government to come up with a shipbuilding policy.
I digress. We might reasonably have expected other bills to come before Bill C-4.
But let us back to Bill C-4. We will support it at least at this stage. We will see if we can continue supporting it in committee. As the member for Longueuil said with her traditional dynamism we will support the bill in principle.
We are aware that they are differences between Canada and Germany with regard to the law. In Canada, even though the executive might ratify an international convention, it does not in itself create law. In Germany, it does. They have a monist system. As soon as the executive creates or signs a convention, it creates law.
Here in Canada for a convention to be implemented, we need an implementation bill. Bill C-4 is exactly that.
I am sure that television viewers are anxious to know that Bill C-4 seeks to implement international agreements. What are these agreements? They are the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.
What do we want to achieve through these conventions? We want to change somewhat the rules of the game in the international aerospace industry. Let us face it: if there is an industry that has been affected by globalization, it is the aerospace industry. A number of companies have their head office in Montreal or in Toronto. Many subcontractors are involved in the building of an aircraft. Sometimes, subcontractors may even be located abroad.
When an aircraft is built, creditors involved in the funding process will sometime ask for loan guarantees. The hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques knows about this, because he follows very closely what is happening on the international scene. When such guarantees are requested, they must of course be provided. It is what is commonly called a mortgage.
Incidentally, this notion is studied in law school. While I would definitely not go so far as to say that these are the most popular courses, students must pass them, because they are mandatory.
When mortgages are sought to provide funding, those who provide them may ask for guarantees. We could have a situation where an international consortium may be the debtor regarding various equipment located abroad, in different countries, and incorporated under different laws.