TRGO Committee Meeting

STANDING COMMITTEE ON TRANSPORT AND GOVERNMENT OPERATIONS

LE COMITÉ PERMANENT DES TRANSPORTS ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 4, 2001

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[English]

The Chair (Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)): Good morning, ladies and gentlemen. I'd like to call the meeting to order. I think I see a quorum.

At the outset, I want to say that this committee proved during our last meeting, on Tuesday, that they want to work in a cooperative fashion. September 11 has brought on a crisis, and we have to look at travel and transport, whether by air, land, or sea, in a serious way to make sure that Canadians are safe and that people get back to their normal lives.

The first wish of the committee was that the Minister of Transport appear. The minister did have some problems, but I'm glad to see that he has shown up this morning. So without any ado, we're going to get on to the minister.

Before we do that, I just want to remind the committee that the minister can only be here for an hour and a half. We are scheduled for a two-hour meeting. Along with him he's brought his deputy minister, Margaret Bloodworth. We have Assistant Deputy Minister of Policy Louis Ranger and William Elliott from the safety and security group. Did I miss anybody?

Mr. Minister, you have five minutes to make your presentation, and then we will go to questions. I assume that your officials will stay for the other half an hour. The meeting is from 10 to 12.

Hon. David Collenette (Minister of Transport): Mr. Chairman, with great respect, if I only have five minutes, I might as well just answer questions. Customarily, when I come to the committee, the committee generally lets me make an opening statement. This statement is not very long, but it will be longer than five minutes.

The Chair: That's fine.

Mr. David Collenette: So if I can have your indulgence there—

The Chair: The only reason we usually say five minutes is that we don't want the minister to take all the time.

Mr. David Collenette: Oh, I would never want to do that, Mr. Chairman. Absolutely not.

I am pleased to be here with my officials. Just to correct the record, Mr. Ranger is the associate deputy minister. You correctly identified Mrs. Bloodworth as the deputy minister and Mr. Elliott as ADM, security and safety. I also have Mr. Hal Whiteman, who is the director general, security and emergency preparedness.

Before I start, I would like to say that the last month has been extremely difficult for everyone in government, but my department has performed in an incredible way—and on little sleep. Resources have been stretched, and I want to thank the deputy and all her team.

I want to take particular time to mention Mr. Whiteman, who is the gentleman who oversaw all the dealings with the landing of the planes and the implementation of the new security regulations. He and his staff in the operations centre, under Mr. Elliott's direction, work incredibly well.

I believe that the work of the committee, Mr. Chairman, is instrumental to the broader effort of the government, and that's why I'm here today. I was able to juggle some events and cancel an announcement in Toronto, one where my colleague Mr. Tonks is going to represent me with the provincial ministers. I'm pleased that you were able to fit me in.

[Translation]

I am pleased to have this opportunity today to meet with the Standing Committee on Transport and Government Operations to discuss the challenges currently facing the transportation sector in the wake of the tragic events of September 11.

As we all know, the impact of the terrorist attacks in the United States is being felt around the world. The human suffering has been enormous in the days following the 11th. The work of this committee is instrumental to the broader effort of the Government of Canada, and all governments internationally, to ensure that our citizens are protected from these horrors in the future.

[English]

Now, there's no doubt that we have a lot of pressing issues arising from these events, and they really fit into the area of safety and security. Then, of course, as I said the other night in the debate, the other most important issue is the financial viability of the Canadian airline industry. I want to address both those issues, not in as much detail as I did the other night, but certainly I want to deal with the safety issues and the security issues first.

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At the time that Mr. Whiteman and his staff were working with NAV CANADA and the FAA to guide all these planes down and then try to get them cleared into U.S. airspace, there were measures being worked on in the security department. Those measures were immediately instituted at airports across the country, including the evacuation of some key areas and the deployment of police at security and access points.

A few weeks ago we took on another monumental task, and that was to reopen the airspace, an airspace that had never previously been closed to commercial traffic. It was a logistical problem, and it was also a safety problem. Between September 12 and September 14, all the restrictions were gradually lifted. It's very important that we only opened the airspace in Canada, and the airspace was only opened in the United States after there was agreement between my officials in Transport Canada, the safety regulator, and the Federal Aviation Administration in the United States, which is our counterpart. In other words, the airspace was opened only once the FAA was completely comfortable and satisfied with the new safety regime we were instituting, as we were with theirs. There was great cooperation: where they had concerns, we addressed them, and vice versa.

The measures included limiting access to restricted areas at airports, tightening security controls, screening checkpoints, increasing the police presence at major airports, increasing passenger screening, enhancing baggage security measures, and implementing measures to prohibit small knives and knife-like objects on board aircraft.

It's important to note that prior to September 11, we regularly reviewed the aviation security system—that is, security regulations, standards and procedures, and equipment requirements. That's part of the ongoing work of the department.

[Translation]

In the face of the changing security environment, Transport Canada continues to ensure the aviation industry is held to the highest safety standards through its heightened monitoring activities.

The Security and Emergency Preparedness Directorate of Transport Canada is responsible for the development and implementation of programs that contribute to the security of the national transportation system. In this regard, the department works in co-operation with all of the relevant federal departments and agencies in Canada and our partners in the United States, including the FAA, as I already mentioned, to prevent incidents that threaten the security of the national transportation system.

A senior Transport Canada official has been appointed to lead a team in conjunction with our security personnel to examine the changing environment, our current approach to security and the department's legislative and regulatory framework.

Transport Canada has in place a rigorous and comprehensive inspection and testing program in which full-time staff are assigned to airports across the country.

[English]

Canada's security programs meet or exceed the International Civil Aviation Organisation's security standards. I want to emphasize that because some people have questioned our air safety regime.

As you know, Mr. Chairman, last week ICAO had its triennial session. It's based in Montreal. Delegates from 180 countries were there, and I was able to meet with some of my counterparts from other countries and their senior officials, as were officials from the department. Canada was universally praised, not only for its efforts on September 11, 12, and 13 in dealing with the planes, but also for bringing forward and promoting ICAO standards.

Implementation of the requirements is a key element of civil aviation security arrangements in Canada, and Canada is a party to all international aviation security conventions. You know all the announcements I've made, and I don't think I should reiterate them in great detail. We announced the closing of the cockpit doors on all passenger flights, domestic and international, for the full duration of the flight. We did that before the U.S. did. We announced that Transport Canada has accelerated the purchase of new advanced explosive detection systems for use at Canadian airports. We have engaged with the FAA and European aviation authorities in the complex task of redesigning the cockpit, not only the doors, but the cockpit area itself, to strengthen the security.

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As I said in the House the other night, those new standards, once we agree on them, will be joint standards. They will apply to Airbus in Europe, Boeing in the U.S., and Bombardier here, the three largest manufacturers of civilian aircraft in the world.

This work was under way prior to the autumn. We were already talking about the need to have greater security in our planes. This is an ongoing effort to try to ensure that you have a much more secure environment.

We're in the process of implementing further enhancements to the passenger screening and additional security measures with respect to cargo shipments. As we continue to implement the security measures, as new issues are identified, we will deal with them.

I'm just whipping through this speech a little bit, Mr. Chairman, sensitive to your time issues.

One issue that has been raised is that the statement by President Bush last week somehow set standards that Canada was not up to. As I said earlier, that's not the case. If the U.S. were unsatisfied with our security environment, we wouldn't be having the planes flying to the U.S. today, and we wouldn't be managing the North American airspace on behalf of U.S. aircraft. So we are very much working with them.

What Mr. Bush did he had to do, and I salute him for doing it. The crisis of confidence in air travel in the U.S. is greater than it is in Canada, for obvious reasons, and he had to explain in a very clear way to the American people what kind of measures were in place, where things had been improved. By and large, with the exception of the issue of air marshals, which we've discussed in the House, where Canada has a somewhat different view, the measures in the U.S. and our measures are the same. Where they are not the same, there's an equivalent level of standard.

This is a very important debate in a macro sense, when we talk about the wider issues of our borders, which my colleagues, the Minister of Immigration and the Solicitor General have been talking about. The standards we have in place, obviously, must be satisfying to the U.S., but their standards have to satisfy us as well. We can do things a little differently, we can do things in the Canadian way, even in the implementation of security measures. The U.S. can do things in a different way. But the net effect is the same. Our officials sit down and talk with them face-to-face or on the phone, and we have agreements in place.

So I don't want anyone in Canada to get the impression that in any way aviation security in this country is any less than that which is being enforced in the United States.

We inspect security measures across the country, but as Mrs. Bloodworth will tell you, we obviously need more people. She has been moving to recruit people, former employees in the short run, to help while new people are trained. That tells you that we really mean business. There are going to be more people, and there are more people now deployed in the oversight.

In the interests of time I will just skip—and I apologize to the translators, who must be having a tough time following my meanderings here—to talk about the airline restructuring.

Some members of this committee—I see Madam Desjarlais here and Madam Meredith—were part of the committee a year ago, when we dealt with Bill C-26, and they worked extremely hard with members from other parties to come to a consensus. Even though there were some differences in approach, I want to underscore the fact that Bill C-26 was passed by the House of Commons. I'm not even sure if it was on division; and I stand to be corrected.

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On the whole, the opposition supported the government's overall thrust to create an environment for the merger of Air Canada and Canadian Airlines—with conditions. Not all the opposition members subscribed to all the conditions, and some wanted more, but by and large I think there was a consensus that a merger was preferable to a bankruptcy, and certainly preferable to a corporate bailout.

So there was a consensus in the House, and I'm grateful for that, and I'm grateful for the opposition's work. I hope we can work together in a similar constructive manner in the weeks ahead too, because we have some difficult issues here. This is not just an Air Canada issue; it's an airline issue. September 11 changed the dynamic of airline revenues, though hopefully just in the short term.

On September 10, Canada 3000 told us they had the best booking day in their history. WestJet has been expanding its routes, so the competition with Air Canada that was the centrepiece of Bill C-26 had been developing. Air Canada's market share had declined from about 82% at the time of the merger to 65% or even lower. That's why the president of Air Canada made statements about the need to restructure, the need to reduce personnel. Air Canada was acutely aware that in order to compete, they had to do things very differently.

So the government's policy—endorsed by the opposition in Bill C-26—was working. We had competition, and there were guarantees of employment in that bill, not only for former Canadian Airlines workers, but Air Canada workers too. There were guarantees of service to small communities as well, which was a great preoccupation of the members of this committee. All of that has been retained, Mr. Chair. But on September 11, everything was hit with a thud. Airline revenues are down, and that has created some short-term problems as a result of the airspace closures in Canada and the U.S.

Everybody knows about the announcement I made the other day to address those short-term cash problems of the airline companies in Canada. We felt obliged to compensate them. I welcome the support. The other night in the debate, I think all parties agreed that this was the right thing to do. I think all parties also have other views on where we go in the long term.

So in the last few days we've got some cash into the system, and we've done some checking. In fact, yesterday I met with the chairman and president of Aéroports de Montréal. He tells me that domestic bookings out of Montreal are approaching normal levels. International bookings are down only about 5%, but that's a big chunk—they largely fly to Europe from Montreal.

Of course transborder traffic has taken the biggest hit. We were told by Pearson International Airport last week that transborder was down about 45% to 50%. Their overall traffic was down about 22%. Domestic traffic was down about 14% to 15%, and the same for international traffic. But that was a week ago. We noticed increased passenger movement last weekend. So we believe the situation is going to improve. Hopefully when the cash comes into the companies they can stabilize the industry in the short term.

The last point I want to make, Mr. Chairman—and you've been very gracious with me—is the Air Canada issue. Whatever happens, Air Canada has a unique set of challenges. They were there before September 11, and they were public knowledge—if you read the business pages of the newspapers, you knew they had these problems to deal with.

We have to decide how to deal with this, and I would be very interested in the views of my colleagues. Should financial assistance be given to the airline industry, including Air Canada, beyond what we announced this week? Can we make any legislative changes to improve the environment? What kind of approach should we take?

I have some ideas, but Parliament is all about getting the views of members so we can craft and shape policy together. If we work as well together now as we did a year or so ago, I think we can put a framework in place that will not only get us over the next few months, but the next few years.

Mr. Chairman, with that I would invite questions. Thank you.

The Chair: Thank you, Minister.

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I want to say that the past chair, Stan Keyes, is here. He had a lot to do with that first restructuring agreement, and I want to recognize the fact that he still takes a keen interest.

Of course the committee is anxious to make sure that we get our job done—that we look at supervision, training, and regulations. I understand some of the bills will go to the justice department. But we may quickly find we have to feed into bills coming here, to do with safety and security of airports. So we should be ready to assist the minister by working on some legislation right away.

The first round is ten minutes, so I'll go to the official opposition. James Moore.

Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance): Thank you.

I want to thank the minister for coming before the committee. I appreciate it. I think it sends an important signal to the committee and to the Canadian public.

I want to ask you about reports from Transport Canada's own studies of airport security. Between May 2000 and May 2001, they tried to smuggle replica knives, guns, and bombs onto planes, and they found a one-in-five failure rate. That means that one in five attempts to smuggle these replica weapons onto planes succeeded. In other words, there's a serious lack of security on the ground, and Canadians are concerned about that. Of course this was obviously before the September 11 attack.

Did you know about Transport Canada's one-in-five failure rate—that 20% of attempts to get knives, guns, and bombs on planes succeeded? And if you knew, what action did you take?

Mr. David Collenette: Well, as the officials will tell you, the infiltration tests are conducted and evaluated on an ongoing basis. Obviously this was a regime I felt quite comfortable with. I think the officials will perhaps explain some of the misconceptions the public have about these infiltration tests, and the implications for security. Perhaps the deputy minister could start.

Ms. Margaret Bloodworth (Deputy Minister of Transport): Thank you, Minister.

As the minister says, the infiltration tests are conducted regularly. That happened to be one snapshot of that time, but in fact they're done regularly at major airports. I won't go beyond that, because we don't like to let the airports know how often we're monioring them.

I should also mention that we don't only use our own employees, because we want to make sure the airports don't get to know who these people are. We deliberately try to make the tests tougher over time.

Let me give you an example. Three or four years ago—Mr. Whiteman and Mr. Elliott can give you further details—there was more emphasis on guns in the tests, and success rates went up, because the tests became easier. However, recently we've put more emphasis on simulated explosive devices, which are tougher to detect because of the various ways they can.... Obviously, making the test tougher drove the success rate down somewhat, but our aim was to make sure the system got better, not necessarily to get the best success rate on the test every time.

When an individual screener fails a test, that screener is immediately taken off screening and put through further training. If the person fails the test again, he or she is not allowed to be a screener again. So it is quite an onerous test, but we think that's appropriate in the circumstances.

Are we satisfied with the results? No, obviously we're not, because we continue to make the tests tougher to ensure that the screeners are rigorously improved. If they're not capable of improving, because it's not a job they're capable of doing, then we make sure they're removed.

Let me turn to Mr. Elliott for any specifics he might want to add.

Mr. William J.S. Elliott (Assistant Deputy Minister, Safety and Security Group, Transport Canada): I think it's important to understand that the job isn't as simple as categorizing guns, knives, and bombs. Without going into detail, we also require screeners to look for things that could be component parts. As the deputy said, we try to make those tests very difficult. We try to use our imagination to get by the screeners, and when one of them fails, that individual is immediately taken out of the screening line to be retrained, and then retested.

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As the deputy said, certainly any failure is not acceptable. We're working with the others involved in screening to make the system ever more secure.

Mr. James Moore: I'd like to ask a question on that point. How many people have been taken off airport security because they've failed these tests? What are the numbers?

Mr. David Collenette: We can get that number for you. We don't have it today.

Mr. James Moore: I'm going to switch now to the issue of nationalizing airport security. Before September 11 there were only three countries in the world that did not have the federal government on the ground managing airport security: Canada, the United States, and Bermuda. I understand the United States is reconsidering that policy. Bermuda—we can't guess. But what is Canada going to do?

Mr. David Collenette: I think the semantics here are important. Mr. Moore says that Canada—i.e., the Canadian government—doesn't manage security. That's not true. Transport Canada is the safety regulator for all transport industries in the country, including the air industry. As part of the lease arrangements with local airport authorities, there are very strict safety measures that must be followed. Transport Canada has the job of supervising safety.

I think the confusion arises because under the devolution of the Canada airports policy it was decided that the screening of passengers would be done by private companies under contract to the airlines, rather than by Transport Canada employees. But a number of members—including Madam Desjarlais, who has raised this in the House—said they thought there would be a better level of comfort if the government took back that function.

Both I and the Prime Minister have said we're prepared to look at that. However, there are cost implications, so even if we announced it today, we couldn't have it in effect by midnight. That's why I've constantly said that my short-term preoccupation is with enforcing the standards, not with who's doing the work. If we decide to change it, as I say, there will be cost implications. But the point is, Canada has very strict supervision, and the Canadian government is the regulator.

I can't answer any questions you ask about the U.S. or Bermuda. I was also told that screening is done by private companies in the U.K. and Australia. I'm not sure about their regulatory regimes.

When the U.S. President talked about getting back into screening, I'm not being negative towards the U.S. government, but they haven't got the same degree of overview and precision as Transport Canada, even though we have devolved the airports. We've been much more demanding in terms of the courses set for the people doing the screening, and the monitoring of them.

Would my colleagues like to say anything more about that?

Mr. William Elliott: With respect to who actually carries out the screening, I understand that in the United States, as in Canada, screening is the responsibility of the carriers. In the U.K., it's the responsibility of the carriers and the airports. Inside Israel, it's the responsibility of the airports, but for Israeli carriers outside Israel, the carriers are responsible for screening. So the situation is different in different parts of the world and under different administrations. But we're certainly not alone in providing government supervision of activities carried out by or on behalf of the air carriers.

Mr. James Moore: The minister mentioned a point in his speech in the House of Commons on Monday night, and he reiterated it here today without broader explanation, so I'm curious. That's the issue of airline security, and the issue of the viability of air carriers—especially in the short term, with a 30% to 35% drop in consumer confidence in Air Canada, I understand.

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You said you haven't done what President Bush did on Thursday of last week in Chicago, when he stood to make a big public announcement about putting 12,000 air marshals on planes, and all these other things. Would it not be appropriate, wise public policy, and smart, in a sense, for the Minister of Transport, the Prime Minister, and the Minister of Finance to make a big public announcement about bold policy initiatives, as they've done in the United States, to curb a drop in consumer confidence by announcing new policies and new regulations? Why wouldn't you make a big public announcement, in order to boost consumer confidence? Wouldn't that be an appropriate action?

The Chair: Mr. Minister, you have two minutes to answer.

That's your last question, James.

Mr. David Collenette: Mr. Moore has raised this a number of times. It seems, in reading the press release he put out, he doesn't really quarrel with what Transport Canada has done, except on the issue of marshals. But he quarrels with the fact that I, as minister, haven't made a big public splash.

I'm not the President of the United States. Our system of government is different. If I'd had a big press conference in Ottawa, Toronto, or Montreal to announce all these measures, everybody around here, including my own colleagues, would be dumping on me for abusing parliamentary privilege.

I've been in the House every single day since this happened. I've been available for questions. We had the debate the other night. I spoke and I'm here today. That's the parliamentary way; that's the Canadian way. We took the decision not to have all these announcements and have a big photo op. We've put them in place as we've developed the regulations. I don't think Canadians want optics here; they want the job done. We've done it and we've done it well.

The Chair: Okay. Thank you very much.

We will switch now to the Liberals and Jerry Byrne, who I think is going to split his time with Paul Szabo.

Mr. Gerry Byrne (Humber—St. Barbe—Baie Verte, Lib.): Thank you very much, Mr. Chair.

Thank you, Minister, for appearing before our committee.

I am splitting my time. Our side has approximately ten minutes, I understand, if there are other members besides Mr. Szabo who would like to ask some questions.

I want to address what our committee is engaged in. When we sat down and reviewed our order of business for the next several weeks and months ahead, point one was a review of the current state of airline safety and security in Canada. We felt, as a committee, that it was extremely important for us to examine the issue and provide recommendations and a commentary about the current state of airport and airline security throughout the country.

We'll also be engaged in the coming weeks in a discussion on the overall commercial airline sector viability and all elements of it, including the airport system. We're confining our comments right now to airline safety and security. Obviously, they are meshed.

You mentioned the notion of some big announcements, and I would like you, Minister, to follow up on that. I understand you have made significant announcements in the airport security sector. I think you've recognized that it's a question of substance over style. Could you just comment briefly on what has been done?

I also want to follow up on Margaret Bloodworth's comments. Security checks are done at major airports. What about local and regional airports? What is the state of the art when it comes to them?

Mr. David Collenette: Perhaps the deputy can address that. I won't enunciate all of the measures because we have written material available and I listed them in the speech the other night. I'm conscious of time, but if that's satisfactory, perhaps the deputy can answer your specific question about small airports, because it is a preoccupation with us.

Ms. Margaret Bloodworth: Thank you, Minister.

Previous to September 11 we had a number of different classes of airports, based on our assessment of the risk. If I can summarize that overall risk, our assessment was that the risk was greater at the bigger, more international airports, for obvious reasons. Therefore, the degree of screening—screening's the most obvious, but there are other measures—was greatest where we felt there were the greatest risks.

We know that at the regional airports, where there was no screening, they did not come into the national system, except through points where they had to be screened. In other words, if you were flying from an area where there was no screening—and it's true today—you did not come into the mainstream of all the passenger traffic at Pearson, for example, or at Ottawa. You went into an area and you had to go through screening before you went to any other area.

Obviously, like everyone else in the world, we are now reviewing what we do, in light of what happened on September 11. We are in the process of reviewing that, along with everything else, because we will have to have new assessments of the level of risk and have measures tailored accordingly.

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Mr. Gerry Byrne: Thank you very much.

Minister, you mentioned there are cost indications with all moves, and quite frankly I think one of the things we have to be very sensitive about is promoting a substance package over a style package. We have a responsibility to maintain airport security, to maintain consumer confidence in the system. Of course, one method of doing that is to push forward with a package that in the long run may not necessarily make sense, or we could focus and direct our efforts on a package that actually makes fundamental, long-term sense but also blends in well with where we're going in terms of restructuring.

I'd like to hear exactly, from the point of view.... There is a preoccupation with major centres. I represent a constituency in a region where of course there are local and regional airports. They are equally part of the airline transportation system in our country. In fact, in terms of their viability, the cost implications for increased security measures are borne disproportionately on a per-passenger basis at those facilities. Is there any discussion of providing greater emphasis or greater care through financial support...? If the government were to move to stronger involvement in airport screening, for example, is there going to be sensitivity about local and regional airports so that local and regional carriers and the airport authorities don't bear an unfair burden of cost?

Mr. David Collenette: We have everything up for review. I've said that before. Everything really is on the table, whether it's the restructuring of the airlines or dealing with security or how we deal with the airports.

Before this happened on September 11, as you know, we had the Canada Airports Act, which is well on its way to being finally drafted and which we should bring in in the new year with a statutory framework governing the airports and airport leases. I would submit that the events of September 11 will perhaps cause us to re-evaluate some of the things in that bill before we bring it forward for your consideration.

Also, it's well known that we have been looking at the rent review issues that have been requested by the airports council for the large airports, the basic 26. Although only a small number of them pay rent now, this will gradually ramp up. That is all being re-evaluated. It was under evaluation anyway, but it's certainly being re-evaluated in the context of September 11.

In doing that for the larger airports, we cannot then forget the smaller airports. So I think it's fair to say that we are doing some re-evaluation as a result of September 11 on every aspect of air operations in the country, and specifically on all airports, big and small.

Mr. Gerry Byrne: Thanks very much, Mr. Minister. I'm going to pass over to Paul. But I will say that as our study continues, both on the overall commercial viability and the airports, I'll put Transport Canada on notice that I'm going to be very anxious and eager to investigate the impact on local and regional services. So thanks, Mr. Minister; I appreciate it.

The Chair: Paul.

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Minister, on September 11 the airline marketplace shrunk dramatically. In my view, if we do not restore confidence in the safety of our airlines in the eyes of the air traveller, Air Canada in its current form will cease to exist. The shakeout in the broader airline industry will be much larger than we've already seen. Who knows what happens as a consequence of that to our economy. So I hope you agree that restoration of the confidence in our airline system is our top priority in the short term.

We have heard from a number of our constituents that issues such as airline safety can be improved by bolting doors, by arming crews, by having armed marshals. One of my constituents even suggested having a sleeping gas system on where the thing could be shut down. Everybody's an expert now.

It seems to me, Mr. Minister, that there has to be an appropriate balance between security and safety on the ground and in the air. On top of that, we should be careful not to institutionalize fear or apprehension by taking certain measures that may raise the apprehension of the airline traveller.

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Are there any requirements for us to harmonize our safety initiatives internationally? And if not, would it not help to restore confidence by having Canada emulate as much as possible the international standard that the consensus is bringing out?

Secondly, Mr. Whiteman had said that in the testing of things it wasn't just restricted to the obvious guns and knives, etc., but components and other more subtle things that would be more difficult to detect. Were the security personnel trained properly for those detections? If not, why not? And are they currently subject to ongoing training requirements?

The Chair: That's the last question. You have two minutes.

Mr. David Collenette: I'll let the officials answer the specific question at the end.

I think that in my answers to Mr. Moore I've tried to demonstrate that our security regime was good before the eleventh, has been improved since the eleventh, and it has been improved in concert with the FAA, which is most conscious of the issues you underlined, to build confidence in the airlines and air travel. That's been a major preoccupation and focus. That's why I get concerned when there seems to an inordinate amount of criticism on small issues instead of having constructive comments to talk about the things we've done, the improvements we've made, which I think should instil confidence in the consumer.

Having said that, I think we're getting our act together in North America. And there are other countries around the world where there is really good screening done and we're very comfortable. Take, for example, London's Heathrow, which is probably the best European airport. Not all of them are up to Heathrow standards. We also know of course that Ben-Gurion airport in Tel Aviv and El Al have an incredible security.

However, there appears to have been an incident this morning, which we don't know any details about, involving a Russian airliner flying from Tel Aviv to Vladivostok in Siberia. News reports are that there may have been an explosion. We don't know yet any of the details.

The point is, there are airports, there are countries such as Israel, big airports such as London's Heathrow, where we're very comfortable with the level of security taken. In some cases, certainly in the case of Israel, security standards are incredibly rigorous, but not all countries are the same. I think one of the things the FAA is determining is they're going to determine what countries they will accept flights from based on their security regime. We're working with them on this and we have this under review as well.

Perhaps Mr. Whiteman or Mr. Elliott can talk about....

The Chair: You have about a minute, gentlemen.

Mr. William Elliott: Thank you.

Very briefly, Transport Canada is very active in the setting of standards and the approval of course content and in supervising or verifying the standards of training. There is regular training. People are trained initially. They are required to be retrained in the normal scheme of things every two years. As I've indicated, if there is a failure, that individual must be retrained immediately.

If there are new developments—for example, a new device is identified that we want screeners to look for—we adjust our course content and standards. We also make sure that information is disseminated to carriers and to the individuals who are conducting screening.

Mr. Paul Szabo: Mr. Chairman, there was a question about the international requirements. The question has come that since Air Canada flies to the U.S. and U.S. passengers get on that plane, is there any....

Mr. William Elliott: With respect to the honourable member's question on harmonization, certainly at the international level—the minister mentioned ICAO—there are international standards that Canada meets or exceeds. We also have bilateral and multilateral discussions with our aviation partners.

• 1045

Of course we are concerned about the level of security of carriers coming into Canada, just as the United States, for example, is concerned about security measures applied to carriers flying into U.S. airspace and U.S. destinations. So I wouldn't actually say things are harmonized, but we are certainly concerned and make sure that the systems applied to foreign carriers coming into Canada provide what we feel is an acceptable level of security. But that doesn't necessarily mean that everyone does exactly the same thing.

Mr. Paul Szabo: Thank you.

[Translation]

The Chair: Mr. Laframboise, from the Bloc Québécois.

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): Thank you, Mr. Chairman.

First of all, Mr. Minister, I would like to refer to a statement you made during your presentation. Twice you said that attempts were made to resolve problems as they arose. I would agree, Mr. Minister, that you have been successful in resolving problems as they have surfaced.

The problem with security, Mr. Minister, particularly as it pertains to air transportation and terrorism, is that we cannot afford to manage things as they occur. You said that you found it difficult to understand President Bush. I can understand why the Americans, in the wake of the Ressam incident, which occurred two years ago, advised you to tighten your security measures.

I asked airline company employees this question myself and I know that, in the past two years, there have been no new measures, no new standards. There is no ongoing security training program for employees. There are occasional tests that employees have to undergo, but there is no continuous training program funded by the government provided to all employees.

Mr. Minister, air transportation security applies to each and every employee, not just those who have been designated as being security officers. All employees who work for an airline company must be given security training. I regret to have to say this, Mr. Minister, but this has not been done, this practice has not been followed. There was no continuous training provided at Air Canada. Why? Because Air Canada has a lot of other issues it has to resolve in addition to the security problems. It has been dealing with financial problems for years.

As we speak, no employee association, no union, no movement representing employees is sitting on the security committees. This doesn't make sense, Mr. Minister.

The company has changed ownership on a regular basis for the past 20 or 30 years. The owners have changed, but the employees, the ones who are always there, do not participate in any real security program despite the warnings given by the Americans. You could always say, Mr. Minister, that the Americans have had problems as well, but they are nevertheless proud of their strength. We do not carry the same weight as the Americans. They can afford to show that they are stronger than everyone else because they are. Canada's problem is that when our neighbours advise us, we have to—and I am hoping that this will occur, Mr. Minister—resolve our security problems.

Regarding the crisis, I hope that the Department of Transportation would have planned, as a security measure, to shut down Canada's airspace. That is one of my first questions. Had such a scenario ever been analyzed in Canada? If so, why did so much go wrong? The ADM organized a press conference and then cancelled it. Security measures were changing every 10 minutes during the first three or four hours. Transport Canada's directives were also changing. As Minister, you did your job, but the problem is that Transport Canada was supposed to do its job. It was not up to the minister to solve those problems. It should have been worked out in advance. I hope there was some plan in place to deal with the closing of Canada's airspace, some sort of security plan. If that was not the case, how did we deal with it? That's my first question, Mr. Minister.

Mr. David Collenette: Thank you, Mr. Laframboise.

I must highlight the fact that Transport Canada is responsible for every aspect of security along with the airlines. There are standards in place and perhaps Mr. Whiteman can tell us more about them in a few moments.

We are responsible for implementing safety standards to protect employees and training is carried out by the airlines. Perhaps the unions will become more involved. Mr. Elliott told me that there is a meeting scheduled for next week involving the major airline unions to discuss ways to improve employee regulations.

• 1050

As for Mr. Bush's announcement last week regarding employee security, especially in airports, I must point out that Canada's regulations, pre-September 11, were more rigorous in terms of the background checks for employees. Before we hire someone, we check with the police, banks and financial credit companies.

It's not fair for you to publicly say that Air Canada did not have any safety standards for its employees. Is it possible to improve these standards? The answer is yes. We shall do so in light of the events of September 11. As I said, there will be a meeting next week.

Perhaps my colleagues can provide you with more information.

Mr. William Elliott: Thank you, Mr. Minister.

I would like to add that next week's meeting will not only involve airline employees or unions, but also all our security partners.

[English]

So we will have representation from airports, carriers, and screening companies.

In addition to this, I want to clarify that training and standards in respect to training by Transport Canada not only relate to screeners, but also to others, including air crew. I also understand that at all the major airports there are operations committees to discuss a number of matters relevant to the operation of airports, including security matters. Unions and employees are in fact represented on those committees.

[Translation]

Mr. David Collenette: If Mr. Laframboise discovers any weaknesses in the measures we have taken, I think it is his duty to inform me of them.

Mr. Ranger.

Mr. Louis Ranger (Associate Deputy Minister, Transport Canada): Having gone through, along with my colleagues sitting at this table, the seven-day saga which followed the closing of our airspace, I can tell you that the Americans were very pleased that they could count on Canada to manage the situation. It was interesting to see that, fortunately, we were able to gradually reopen our airspace and to do so more quickly than the Americans. As new measures were being announced, the Americans were taking note before finalizing their own measures. In several cases, they were quite simply impressed by the rigour of the measures we had taken.

Mr. Mario Laframboise: Let me repeat that you managed the situation well—as you have said yourself, Mr. Ranger—as time went by. Our problem is that security must be planned in advance. It's better to be safe than sorry. Let me repeat that I am pleased that you called the unions, but in my view, the people in the best position to tell you about safety problems are Canada's airport employees. Transport Canada has never worked at that level.

It never occurred to you before today, despite the warnings... I repeat, the Americans issued serious warnings two years ago, with the Ressam affair, concerning terrorists who crossed the border. No new steps were taken. No new standards were set, and no employees participated in security programs to help us settle this. That is the reality.

Mr. Louis Ranger: Mr. Laframboise, the way—

[English]

The Chair: You have two minutes for the answer, please.

Mr. Louis Ranger: I will be shorter than that.

[Translation]

The way we prepare ourselves to face such situations is to make sure we can activate the necessary systems to be ready for any eventuality. We can never foresee in specific detail how events will unfold, but we can be prepared to react very quickly, with all information systems in place to be ready for any eventuality. That is what worked extremely well for us, and served us very well.

[English]

The Chair: I'll go to Madam Desjarlais, to Jim Gouk, and then back to the Liberal side after.

Mrs. Bev Desjarlais (Churchill, NDP): Thank you, Mr. Chair.

There is no question, Mr. Minister, that the situation on September 11 has changed the whole outlook on how security should be dealt with at airports, but also on how people travelling will want to see security at airports. It is crucial that we look at it from quite a different perspective.

• 1055

I am going to address most of my questions about security to Mr. Elliott, and because I only get so much time, I would ask that you be as brief as possible in your answers. If there is a particular number, I would appreciate it if you could simply give me the number without any preamble.

First off, can you tell me who is responsible for the training of security guards throughout the nation within each of these security groups? Is it done by Transport Canada, or is it done by representatives of the company that the security guards are working for? Can you tell me if there is a certification issued, such as a certificate of qualification, to any of the security guards? Can you tell me if there are security checks done on volunteers, shopowners, anyone who works on the other side of security within the airports? Can you tell me if police checks are done on the security personnel as well as the volunteer shopowners on the other side of the security at the airports?

As well, when security guards at airports are checking for things, do they strictly check for items that are not to be taken onto planes? Are they also supposed to take note of things that look suspicious, like drugs or huge amounts of money going across the counters? Or are such things not within the purview of what they have to deal with, and they simply put those things through because they haven't been trained to deal with them or haven't been licensed to indicate them in any way, shape, or form?

As well, there have been a number of instances of drugs found in the panels of airplanes, a good number of them in planes that have ended up landing in Winnipeg over the last few years. They have been in panels of a number of Air Canada planes. The most recent one in the last couple of weeks came from either Bermuda or the Bahamas, through Florida, into Winnipeg, and it was never picked up. Is it not true that usually in situations where drugs are involved, there is an increased risk of security and safety for passengers?

Mr. David Collenette: I'll let my officials answer this, because you have quite a shopping list of details.

Mr. William Elliott: Thank you, Minister and Mr. Chair.

We set standards and oversee training with respect to people involved in the screening of passengers and crew, as I have indicated. Other people involved in security at airports include the Royal Canadian Mounted Police and police of local jurisdiction. Transport Canada does not play a role with respect to the certification or training of those individuals. Airport authorities also employ security guards, and we do not play a role with respect to their certification.

On your question relating to shopowners and others who operate in restricted areas of airports, we certainly do play a very strong role. No one can be provided by an airport authority with a permanent pass allowing them access to a restricted area unless a clearance is obtained from the Minister of Transport. We work in cooperation with other agencies, including the RCMP and CSIS. Criminal records checks, credit record checks, and other security checks are conducted by those agencies on those individuals. The program requires that clearances be renewed every five years.

As to the honourable member's other questions, perhaps I can ask Mr. Whiteman to address them.

Mr. Hal H. Whiteman (Director General, Security and Emergency Preparedness, Transport Canada): Thank you. And thank you to the committee for your warm welcome.

With respect to other items, our screeners are trained to detect dangerous goods, because they also can pose a safety and security problem. They are not trained and indeed they are not mandated under the Aeronautics Act and by law to detect things not related strictly to the security of civil aviation.

That said, we cooperate with police authorities when we can. When we're aware of what it is that might be going on, we try to facilitate whatever they may have to do to enforce the Criminal Code of Canada. Also, we must remember that the technology used for screening is directed toward identifying certain kinds of objects, and other things are not necessarily captured by this technology.

• 1100

With respect to things found aboard aircraft coming from other jurisdictions, we are very cognizant of the fact that some places pose a threat to the security of civil aviation. We do overseas inspections for cause when we have reason to believe that there is a problem.

Members should also be aware that when aircraft are brought into service during the day, there are requirements with respect to searching those aircraft so there is nothing on the aircraft when it departs that could harm civil aviation.

Mrs. Bev Desjarlais: Mr. Chair, I probably still have time because it was done so quickly.

Now, you indicated that either you or Transport Canada over—

Ms. Margaret Bloodworth: On the drugs question, I would just add that there are undercover RCMP units located at certain airports and that at others the RCMP are involved. Drugs are primarily the responsibility of the RCMP and the local police.

Mrs. Bev Desjarlais: Okay. So if it was found in baggage, nothing would be really...it would go through the baggage, and unless there were an RCMP officer there, nothing would really happen.

Ms. Margaret Bloodworth: Well, I'm saying it's not their mandate to do that, but there is police response at airports. I'd be surprised if in those circumstances there were not connections with the police who were there.

Mrs. Bev Desjarlais: You indicated Transport Canada oversees the training of the scanners, the people who do the security scanning. Is that done whereby people are certified through someone within the company, or is there someone officially from Transport Canada there?

Mr. Hal Whiteman: The training is done by the air carriers. We certify that the training has been completed successfully at the major airports through having our inspectors present at a testing process.

Mrs. Bev Desjarlais: So it's the air carriers themselves that are doing the training, not the security companies.

Mr. Hal Whiteman: The air carriers do it by contract. On some occasions the companies themselves do it.

Mrs. Bev Desjarlais: I'm trying to be really specific here, because I want to know who is physically training these people now.

I know that the air carriers contract out the business of doing the security. I also know that the security companies tend to do some of the training, and I know that for a fact. I would also ask you exactly what's involved in that training manual, bearing in mind that it was a number of years back that I saw one, and—I'll be quite upfront—it wasn't really an in-depth training manual. I know that the recertification process is not extremely in-depth or followed through on in great way, so I would like to know exactly who is responsible.

I know that at one time in some of the provinces they licensed security companies, but if you work strictly at an airport, there's no provincial oversight, so there's no licensing through the provinces for security personnel; it's only if you do security in other areas of the provinces, and that's in some of the provinces I've checked. If you work strictly at an airport, it is the security company and the air carriers who do it. I doubt very much if Mr. Milton is going there and checking to make sure that these people are getting their security training, so I would like to know exactly who is doing it.

The Chair: You have one minute and a half for the answers.

Mr. Hal Whiteman: That's more than enough, given how fast I can speak.

The air carriers usually have the training done by contract by the guard companies. There are airlines that do that training themselves. The certification is done by Transport Canada at the major airports and is done by the air carriers on behalf of Air Canada at smaller airports.

The manual we use for training purposes is kept up to date. I think it's probably fair to say that with the growth of the complexity of security it's a good deal more comprehensive than it was.

The testing the people must go through includes a classroom-type test, and Transport Canada sets the standards and changes the exam questions so people can't do the same thing every time. The follow-up to the testing is, as the deputy minister and the minister described earlier, done on a regular basis.

Mrs. Bev Desjarlais: Thank you.

Mr. David Collenette: Mr. Chairman, perhaps I could ask a question. Is this any different from the regime that existed when Transport Canada employees used to do the screening? It's the same kind of approach, I assume.

The Chair: Okay.

[Technical difficulties—Editor]

• 1105

Mr. Hal Whiteman: Dogs are used for a variety of purposes. Sometimes when you see dogs at airports, they are looking for things that have more to do with the enforcement of the Criminal Code, drugs, etc. There are circumstances where dogs are used for the detection of explosives. They're very effective. There are trained teams. They are operated by the police, and they go through a rigorous training process. So it will vary, depending on the circumstances.

The Chair: Thank you.

Mr. Collenette.

Mr. David Collenette: When I came back from Barbados a couple of years ago, I inadvertently brought an apple from Barbados, and I put it into my hand luggage. The dog found me at Pearson airport, and I went through a rigorous search. So I can testify about dogs and how they work.

The Chair: Mr. Gouk.

Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian Alliance): Knowing the propensity of ministers to want to answer as fully as possible and consequently not get to as many questions as I'd like, I'd like to pose some statements and then have the minister or those accompanying him answer.

First of all, the minister said that there was unanimous support for Bill C-26. I would point out that there wasn't a whole lot of choice left at that point. There was an arbitrary decision by government to limit the amount of foreign investment in an airline, which reduced Canadian's opportunity for further investment. There was also an arbitrary decision by government to restrict the number of shares any one individual, including a Canadian, could own in Air Canada. This is what killed the Onyx deal, which in my opinion would have been far superior to what we ended up with in Bill C-26.

In terms of security, one of the concerns is that it doesn't matter what you put into Pearson airport or Montreal or Vancouver. You fly people in from little tiny airports that don't have X-ray machines and that have very limited security, and that is the weakest link. Those people fly into secured areas of major airports, including people flying in from other countries. Has the government given any consideration, as has been discussed in the past, to perhaps cancelling security at these tiny airports and flying them into segregated areas of major airports where, if people wished to go on a major airline, they'd then have to go through the more enhanced security?

Secondly, in terms of on-board suppression and locked doors, I have flown on four aircraft since September 17, which, I understand, is when the policy was put in place, and in each case the cockpit doors were open. These were Airbuses and Boeing 767s. If that is the policy, it is not being adhered to.

The final item I would like to mention is air marshals. If we want to get the confidence of the Canadian travelling public, particularly since one of the greatest problems right now is transborder flights, why would we not offer the same level of security on Canadian aircraft as the Americans are offering? If we don't do that, would it not in fact put Canadian airlines at a disadvantage in not being able to provide this level of security to their passengers?

One other thing I would add is would the minister be willing to table with this committee any ministerial directives to the department on airport security since September 11?

Mr. David Collenette: On the last question, most government documents are accessible under ATI, and if we can make them available to you, we will. We want to be very open with the committee.

On the issue of cockpit doors, which Mr. Gouk mentioned, someone else raised this with me. I have to say that if you've been on flights where this is the case, you have an obligation as a member of Parliament to report that to me or to my officials, along with the flight number, the date, and the time. We'll find out who was crewing that plane. If pilots are not obeying the regulation under the Aeronautics Act, there is the potential for disciplinary action, and I wouldn't rule out decertification. We're serious here, and I think all of us have an obligation. We all fly on a daily or weekly basis, and we have to be the eyes and ears for the travelling public. So I would ask that you provide that information to me, because I want to know about it.

• 1110

In the case of restricted areas, my colleagues can deal with that. I believe the point you raised is the case that where airports do not have security in the first instance and there are connecting flights, those people are put into sterile areas for—

Mr. Jim Gouk: I'm not talking about airports with no security. I'm talking about where they have very reduced levels of security and they are flying into secure areas. For example, I fly out of Castlegar, which has no X-ray equipment whatsoever. It's a hand search. Believe me, it's a whole lot easier to smuggle something by under those circumstances. I go into a secured area in Vancouver or Calgary.

Mr. David Collenette: I'll let my colleagues deal with that.

Going back to the earlier point, I know that there were different ideas on the 15%, the 10%, as it then was, and the 25% foreign ownership, and I appreciate that. But you basically have confirmed the fact that notwithstanding that, the opposition by and large agreed. There was no recorded division on Bill C-26. We all worked together on this. My colleagues weren't totally satisfied on some issues. We moved, for example, on the air travel complaints commissioner. That came from this committee. It may have been an opposition idea, I'm not sure, but it didn't matter. It was a good idea. We accepted it. So we try to work on a collegial basis.

Mr. Jim Gouk: But don't forget that the Onyx deal had been removed from the table by that point because of the Air Canada share restriction.

Mr. David Collenette: Yes, but if members had felt that the conditions imposed on Air Canada by Transport Canada and the Competition Bureau and the Bill C-26 regime were unsatisfactory, that deal could have been stopped. The option was the bankruptcy of Canadian Airlines, which was always on the table. But you know as well as I do that the objective of members of Parliament, especially those from the west and especially those from the Alliance Party, was to do whatever we could to ensure service to small communities was preserved in western Canada and elsewhere in the country and also to preserve jobs at Canadian Airlines, and that's what the deal did.

Mr. Jim Gouk: We were pragmatic enough to accept it. When the better deal was gone, we accepted what was left.

Mr. David Collenette: Perhaps my colleagues could answer.

Mr. Hal Whiteman: With regard to the question about the reduced security at smaller airports, I wouldn't accept that the security is reduced. What I do accept is that the suite of equipment that is available is not as great as it is at larger airports. But the people are trained to do hand searches, and I believe they do them very well. There are standards they have to conform to. We also have to understand that there have to be options for the air carrier industry to do searches because equipment will break down from time to time, and people have to compensate for that. Equipment is not perfect.

Obviously, we are re-examining where we need equipment and what kind of equipment we need. Is there a capability and is there technology that can improve our ability to screen? Those are issues that are very much under active consideration.

Mr. Jim Gouk: The point about air marshals was also raised.

Mr. David Collenette: We talked about this in the House. Mr. Moore raised this on a number of occasions. We have a great reluctance to introduce any firearms into the cabin under any auspices. In fact, Mr. Bush rejected the notion of air crews being armed, as have the Air Transport Association and pilot unions in Canada. This is an idea that has come, I think, from ALPA in the United States.

Once you introduce a weapon under whatever circumstances in a pressurized environment at 35,000 or 39,000 feet, the potential is great. There may be other ways in which we can deal with on-board security. I don't want people to think that we're being cavalier here, and it's not just because the Americans are putting armed marshals on board. We really do have some very serious concerns.

With regard to how this is going to impact on transborder traffic, I believe we have to assure the travelling public, especially those coming from the United States, that the safety regime in Canada is rigorous, notwithstanding the fact that there will not be air marshals on board these planes. Certainly if our standards were unsatisfactory to the FAA, they would advise American carriers not to use Canadian airports. They do not do that because they're comfortable with what we're doing. As I've said time and time again, I would rather deal with the security issues on the ground to prevent the occurrence than to go the extra step, which is potentially fraught with problems, of introducing armed personnel on these flights.

Mr. Jim Gouk: If we are successful in screening on the ground, then these air marshals are never going to have to act.

• 1115

If your only concern is them puncturing the hull of the ship or wounding an innocent passenger, the Americans have been flying those marshals since I believe 1968. Do you know of a single instance, a single one, where either of those situations has occurred?

Mr. David Collenette: Well, there's been some misconception about the air marshal program. It was introduced, as you say, in 1968, but really fell off. In fact, the number of air marshals—I won't give the number, because I shouldn't—was very much reduced in recent times. One could question whether it really had any effect, given the thousands of flights that were flying in the U.S.

The Chair: Thanks, Minister.

I'll move on to the Liberals, then I'll get back to Val Meredith after that.

You have ten minutes, I think, Mr. Shepherd, and maybe you could share your time with Mr. Harvey.

Mr. Alex Shepherd (Durham, Lib.): Yes.

I'd like to deal with the issue of airline insurance. I know through your quick actions you sort of stalled off a significant problem, but it seems to me it's through the regulatory environment.... It seems to be the policy to allow airlines to enter into insurance agreements where there's an exempting provision: if an incident occurs, they simply can withdraw their insurance. The obvious ones are war, hijacking, and other perils. I presume the reason that's done is it affords them a lower premium.

Looking back on the merits of that, where a day after a significant incident occurs insurance companies simply withdraw their liability insurance on all aircraft, the effect of course is to ground all aircraft in the world, which obviously is not very conducive for continuing to fly. I know your quick action to indemnify and stand in their place for 90 days was a positive one.

In looking forward to these insurance policies—and I know this is probably evolving to some extent—is that a policy we're going to continue, given the fact that it's created a great deal of hardship in the intervening period?

Mr. David Collenette: My deputy will answer that question, Mr. Chairman.

Ms. Margaret Bloodworth: I should just be clear that the decision about the war indemnity clause had nothing to do with the airlines. That was a decision of the insurance companies worldwide, most of whom are located in England, actually, the ultimate insurance companies.

It did not result in any lower premium. In fact, the premiums have gone up for airlines generally. They basically said they were not going to provide that kind of third party liability. They had to give seven days' notice, because they have the ability under these policies to give seven days' notice. It was not a purely Canadian problem; it was worldwide. We did step up and deal with that for a 90-day period, as have most governments. The U.S. has done something, as has the U.K., in most cases time-limited, either 90 or 180 days. The reason for that is that we are hopeful in that period that the private sector will come up with what coverage they're prepared to offer.

What the government has is requirements as to the amount of insurance required. The reason why they wouldn't have been able to fly is because we require them to have this third party liability, which disappeared. It is an issue. Obviously the government has created a solution that allows time for the private sector to decide under what conditions they will offer it over the longer term.

Mr. Alex Shepherd: But I presume why it was allowed to disappear is it was obviously an advantage to the insurance industry, and presumably that reflects in the premium structure they charge those airlines. So I'm assuming that the alternative for regulatory authorities is to say you cannot interrupt that—in other words, you have to let the policy go its full cycle before you change the terms. Presumably that would create a significant increase in premium.

I note that some of our airlines are now implementing a tariff, an insurance surcharge.

Ms. Margaret Bloodworth: Well, that's because.... Sorry.

Mr. Alex Shepherd: Incidentally, another point comes out of that during the 90-day period as well. So I guess my indirect question is if they're imposing a tariff during this 90-day period, is that the revenue of the government, since we're providing the indemnity?

Ms. Margaret Bloodworth: No. What had happened is insurance premiums overall have gone up significantly. The insurance companies raised their premiums significantly as a result of the incident on September 11. They cancelled entirely the third party liability for war or terrorism. That's what the government's providing. The government is not charging a premium for that 90-day period. So what the airlines are charging a surcharge for is for the increased premiums of other insurance. All insurance has gone up significantly.

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Mr. Alex Shepherd: So are you saying you anticipate a further increase in the surcharge once the insurance companies come back on board, that they're going to provide you with this insurance but at a significantly higher premium?

Ms. Margaret Bloodworth: The honest answer is we don't know at this stage. At this stage, that's not available. When they took it away, they did not give any reduction, because they said they were not charging for it. I think what has happened is it was considered an insignificant risk, therefore they added it. As of September 11, it became a significant risk.

Whether or not they will have further increased premiums or whether it will be part of the overall increased premiums is still not determined. We simply don't know at this stage.

Mr. Alex Shepherd: But from a regulatory environment going out into the future, would it be the attitude of the government that this insurance should be in place on a basis that doesn't allow for cancellation on an incident such as that, that it has a cyclical environment, that it goes to the end of the policy period?

Ms. Margaret Bloodworth: As I mentioned, the difficulty with that is the insurance of airlines worldwide is not held in Canada or in the United States. Most of it is held in Britain. So there's a question of our power to do that vis-à-vis the insurance company.

How we approach it is to require airlines, airports, and NAV CAN to have a degree of insurance. But our ability to regulate insurance companies that don't exist in this country is quite limited.

Mr. David Collenette: But perhaps I could introduce another point here, because what the deputy says is very serious. We're dealing with a small number of insurance companies not based in Canada, which we cannot regulate, which I hope are not using this position of terror to extract premiums that are unfair. That's why the committee may want to debate the issue of whether Canada, as a state, as the government, continues self-insurance indefinitely. This may be the only antidote to perhaps the inordinate bargaining power of the small group of insurance companies that insure worldwide.

The Chair: Mr. Shepherd, you've finished.

Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): Thank you very much, Mr. Chairman, and at the outset, I want to thank you for your kind remarks.

I want to thank the minister for his presentation and for making himself available to this committee. My experience has always been that he does move quickly and is prepared to participate with this committee at sometimes a moment's notice.

My question has more to do with procedure and structure. I wonder if the minister can tell us, is he, and his officials who will supply him with information, an active participant in this new body called the safety and security committee, a special committee of cabinet? I would like to know if the minister will be bringing forward any suggestions and changes to legislation or regulation to this cabinet committee, how soon he might be able to do that, if he is involved.

And beyond that, given that most Canadians who are flying today need that security, knowing their ride on that plane will be safe, changes have to be made, obviously, to legislation and regulation, and given that Canadians are somewhat expecting those changes to have occurred yesterday, and given that the reputation of doing government business, legislative or regulatory, usually is at a snail's pace given the nature of democracy in this country, can the minister tell us under what authority he would be able to act in order to address quickly the issues of safety and security to meet the needs that are expected of Canadians today in a way that holds true to democracy but at the same time makes our skies that much safer?

The Chair: Mr. Minister, you have but two minutes, because I want to make sure Val has her full ten minutes.

Mr. David Collenette: The Aeronautics Act is very comprehensive and does give the minister the regulatory authority to deal with most of the concerns that have been raised by Mr. Keyes and others. We did have a revision of the Aeronautics Act in the works, to be introduced next year. We will probably be bringing that forward to give some clarification and enhanced procedures. So on the assumption the government moves with a security package in the short run, we wouldn't necessarily be part of that, because we don't really need those powers to deal with this particular environment, although there are some improvements that could be made to the Aeronautics Act.

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The next point is that I am a member of that committee; it has been announced publicly. Obviously I'm not going to discuss here what is discussed at the security committee, except one would expect that all aspects of security are discussed, including aviation security.

Mr. Stan Keyes: I didn't assume you were going to tell us anything. My question was more on whether you will be part of the justice package that would come, and how soon might that come.

Mr. David Collenette: This is really something Mr. Manley should be speaking to. He is the chair of the committee. So I don't really want to go down that road.

I do want to underscore the fact that the Aeronautics Act has enabled us to move quickly with the regulatory powers it gives the minister already, as a result of the events of September 11.

The Chair: Okay.

Ms. Meredith of the PC/DRC, you have ten minutes.

Ms. Val Meredith (South Surrey—White Rock—Langley, PC/DR): Thank you.

Thank you, Minister, for appearing before the committee as quickly as you have since the committee got under way.

There are a few questions I'd like to ask, relating to what has been said here. One is on the risk assessment at airports. What is taken under consideration to determine what and how high the risk is, and who makes that determination?

Mr. David Collenette: I'll let my officials answer that. I'm not sure how open we're going to be, for obvious reasons.

Ms. Val Meredith: Yes.

Mr. David Collenette: We don't want to publicize on national television the standards under which we evaluate various risks and at which airports.

Mr. Whiteman will speak to that.

Mr. Hal Whiteman: Thank you.

We keep the security assessment at airports under regular review. There are a number of factors that go into that. Many of those, indeed most, that go into the determination are security indices. It's work that we do with the RCMP, CSIS, and other security agencies.

I think it's generally an accepted principle that the larger the airport, the closer it is to an urban area, the more challenges there are from a security perspective. So it's not surprising that when you go to a Pearson airport, or a Vancouver or a Calgary, the level of security, or the obvious perceivable level of security, is high. But there are other airports of particular concern that are smaller, and we make special security arrangements with respect to those airports based on the security and other indices.

Ms. Val Meredith: Thank you.

I want to bring up an issue with the air marshals. My concern is that Canadian air carriers are able to maintain service to American cities, cross-border routes. I understand that Ronald Reagan Airport is not allowing any planes to land or take off unless there is an air marshal aboard that aircraft. How does that reflect Canadian carriers? Has the government made any arrangements for that ruling or that decision to be suspended to allow Canadians carriers to facilitate travel to those airports?

Mr. David Collenette: First of all, there have not been any restrictions placed on Canadian carriers to fly to U.S. airports. As I say, the FAA has been satisfied with that. The one exception, of course, is with the reopening of Reagan National Airport in Washington. There have been restrictions on foreign airlines operating out of that airport, but Air Canada was the only foreign airline and was treated as a special arrangement under our treaty with the U.S. almost as a domestic carrier. But not all domestic carriers and not all U.S. cities are being allowed out of Reagan.

Hopefully I'll be speaking with or seeing Mr. Mineta next week, but we want to clarify what their plans are for Reagan, because it appears that they are gradually phasing back and they want to be very careful. So I think they've limited the service to a specific number of cities, to a certain number of airlines. Certainly we will discuss with them what their position on Air Canada will be as we move ahead. So I don't think you should take this necessarily as a definitive decision by the U.S. government.

Ms. Val Meredith: Thank you, Minister.

I want to switch to the issue of Air Canada and the situation it is faced with economically, financially. When we dealt with the issue of a monopoly airline, decisions were made because it was felt that Canada could not support two major national airlines but would be able to support one.

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The competition commissioner got in to allow Air Canada to in essence be a monopoly carrier. Controls were put in place, but one of the issues that was raised at the time was the concern that the government—although it's involved in the industry from a regulatory point of view and from a safety point of view—with the exception of Air Canada is not involved in the operations of the airline as a company, per se, other than regulatory and through safety.

The exception to this is Air Canada, which is under the Air Canada Public Participation Act, which restricts the domestic ownership of a private company in our country. That was raised as a potential problem 18 months ago, two years ago, and it has shown itself to be a problem. Is the government looking at removing those restrictions to allow Air Canada the ability to operate like the other air carriers in Canada and to have access to capital by being rid of these restrictions?

Mr. David Collenette: When the Mulroney government privatized Air Canada, they felt the shares should be widely held, I suppose to prevent individual shareholders from controlling the airline. I never quite understood the logic, but certainly that was there. When we brought forward section 47 under the Canada Transportation Act, which allowed private sector offers to come forward with respect to the reorganizing of Canadian Airlines or dealing with that, this was obviously the position that was raised by Onyx company, and Air Canada vigorously contested that and contested it in the courts.

I should also say that when we were brokering the deal with Air Canada, before the commitments and obligations were signed in December 21, 1999—and Mrs. Bloodworth was the chief negotiator for the government working with the Competition Bureau—Air Canada made it quite plain that it was a key condition of theirs for taking over Canadian Airlines.

It now appears from a press release that Mr. Milton sent out on Monday, following your question in the House to me where I said that we were open to changing it, that the Air Canada board has changed their mind. Whether or not they changed their mind had no bearing on my answer, because I think it's fair to say the government has come to the conclusion that this 15% does arbitrarily restrict capital inflows into Air Canada. So the question is should it be raised higher and by what amount? I'd be interested in having the views of the committee on this in your deliberations.

Ms. Val Meredith: I would say, Mr. Minister, that the question is should the government be involved in restricting domestic ownership in a Canadian company? I think that's the question.

The government, I would suggest, does have a role in the regulatory provisions of an airline; it does have a reason to have controls for safety and security of the airlines. I think the question is, does the government belong in owning, in controlling the ownership, of a Canadian company?

Mr. David Collenette: This is something I'd like your views on in terms of the ownership limits as they pertain to Canadians. But there is another provision, as you know, that restricts ownership to 25%. The law does allow us to go to 49% by virtue of an order in council, and we rejected that before. I said the other day in my news conference that if everything's on the table, we want to discuss this.

Philosophically, I think many of us—and I'm one and I make no apologies—believe there are essential industries that should be in the hands of Canadians. I suppose if we can have our cake and eat it too, and refinance Air Canada and keep it in Canadian hands, that's the best of all objectives. That may not be possible; I don't know. We'll have to see. That's why all these matters now can be discussed.

Ms. Val Meredith: Thank you.

The Chair: You have two minutes, Val, if you want.

Ms. Val Meredith: No, that's fine.

Mr. David Collenette: I have to leave, Mr. Chair.

The Chair: Mr. Minister, if you don't mind, the committee understood that your staff was going to leave, so I have a quick suggestion. I have four people who want to ask questions. If they all give one question, could you make quick, short answers to them?

Mr. David Collenette: The officials can stay, if that's okay with you, but I have to go and I made that plain. I have another commitment that I cannot get out of right now.

The Chair: I see. I'll go for four quick questions starting with Mario with one, James with one, Marcel, and Bryon.

Mr. David Collenette: Mr. Chairman, I'm certainly willing to come back after the break. So these questions could be addressed to the officials, and if you want me back after the break I'll be more than willing to accommodate.

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The Chair: The break week, you mean?

Mr. David Collenette: The break week, yes. The week after next.

The Chair: Yes.

We'll go with those quick questions and then I want to have a quick in camera meeting just to firm up some of the things we are going to be doing right after.

Mario.

[Translation]

Mr. Mario Laframboise: My question is for the minister. I will put it to him in the House. Thank you.

[English]

The Chair: James.

Mr. James Moore: I have one question. Perhaps the officials can help me on this.

There was an incident at Pearson International Airport where a police officer was trying to get onto a plane and one of the security agents at the airport tried to stop the police officer and have some sort of an inspection. I don't know the entire specifics of the case. I'm not asking for the specifics, but I do know that at the end of that the airport security guard was taken to the police station and strip-searched. The point is that the airport security guard did not have sovereignty over the airport security itself. The powers of the police officer trumped the powers of the security guard at the airport.

Why is that the case? How can we change it so that security officials at the airports are pre-eminent? I know in the United States, for example, the National Guard still is at airports in the United States. That was mandated by President Bush. That will obviously be phased out as they decide whether or not to nationalize their airport security. But my question for Canada is why don't security guards have full legal sovereignty over their own jurisdiction, which they're supposed to have security over?

Ms. Margaret Bloodworth: I'm not going to comment on the specifics of the incident because I don't honestly know them. I understand it is under investigation. It's not our view that security guards should have full sovereignty over police. The police have a particular role, and one of our security requirements is that the major airports have to have police able to respond to security points within given times. We have reinforced the police presence. Police are a different level of security from the security guards. So it certainly wouldn't be a direction we would be going to give the security guards rights to order police around. Police are there for a different reason. They're there to deal with crimes.

I don't know whether you want to add anything to that, Bill.

Mr. William Elliott: No. The only thing I would add is I think it's fair to say, as I mentioned earlier, that there are a number of partners involved overall in relation to security. I think by and large those agencies and different individuals work well and cooperatively. Sometimes, unfortunately, that's not the case. We are certainly interested in doing all that's possible to make sure that security is maintained overall, and this certainly requires that we have good cooperation individually and between agencies. This is something that is of concern to us.

The Chair: Marcel.

[Translation]

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you very much, Mr. Chairman.

I had intended to share my disappointment with the minister. During the debate in the House last week, I congratulated the minister and the Department of Transport for their good work in managing the crisis. I want to repeat my congratulations. However, I am very disappointed with the nonchalant and cavalier attitude of the deputy minister, who tells us that a screener who fails a test has the right to a second chance. He is retrained and given back his job.

I think it should rather be the opposite. Screeners are the gateway for terrorism in the airports. I believe it would be a very important incentive to ensure that all screeners understand that if they do not do their job, they will be fired and perhaps even charged under our Criminal Code. I hope that Transport Canada's review of the regulations will ensure that if these people strike out on the first try, they will not have the right to a second chance.

Mr. Chairman, my question concerns highly-populated areas. I would like the officials from Transport Canada to tell me what Canada's policy is regarding security, and allowing airplanes access to highly populated areas. How is it possible—and I also mentioned this in my speech to the House—that airplanes and all kinds of aircraft are flying above the Peace Tower here, in Parliament, for entertainment or tourism?

Thank you.

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[English]

Ms. Margaret Bloodworth: First of all, regarding your first comment, Monsieur Proulx, as I said, our current system is somebody is removed immediately, retrained, and given a second chance. Obviously we are reviewing everything in that context, but at the moment we don't consider it unreasonable to retrain somebody, take them off their job, and give them a second chance.

Mr. Marcel Proulx: Well, I do.

Ms. Margaret Bloodworth: No, I understand that, and we will look at that as well.

In terms of the airspace, airspace is controlled by NAV CANADA on a day-to-day basis and an hour-to-hour basis, pursuant to orders or regulations that we may have. Airspace can be closed and has been closed at various times in the last few weeks. There was a period of time following September 11 when the airspace was closed over Parliament Hill, for example. In general, it is open subject to people following the aviation rules, unless there are specific security threats. We work very closely with NAV CANADA on that.

In relation to tourists' flights, there have been occasions when they have been prohibited, mostly—in fact in all of the occasions I recall—because of the noise for local inhabitants. But they've been mostly in areas such as Lac Augustine in Quebec. This area was a fairly small municipality. In the end the municipality waived the pros and cons of the business associated with tourism and flights with the inconvenience to people. Their decision was that they did not want flights, and we did act to prohibit them in certain areas. We have not done that further.

Having said that, as I said at the beginning, as a result of September 11, we, like all regulatory administrations in the world, and indeed all organizations in Canada that have anything to do with security, are reviewing everything we do. We will review that as well.

Mr. Marcel Proulx: What are the rules and regulations for private planes around the Peace Tower, around the Parliament Buildings?

Mr. William Elliott: Perhaps I could answer that, Mr. Chairman.

Following the events of September 11, the requirements with respect to the airspace around Parliament Hill were in fact altered. The airspace around Parliament Hill was restricted. Private aircraft are not permitted. That's a situation that continues today. Unless steps are taken to change that, that's the ongoing situation.

Mr. Marcel Proulx: How close can they get?

Mr. William Elliott: Within two nautical miles, 2,000 feet.

Mr. Marcel Proulx: That's fairly close. I live locally, and I get complaints in my riding office from people who are afraid of small pleasure airplanes wheeling around the Peace Tower. They are asking what's happening here. Are there not sufficient reasons to change this? Two nautical miles and 2,000 feet are very close. Could it not be further away than that?

Mr. William Elliott: Certainly we can further consider this. In general we strive to find the right balance between security on the one hand and the operations of civil aviation on the other. To date, based on our assessment of threat, we have felt that the current restrictions put in place are reasonable, but certainly they can and should be reviewed on an ongoing basis.

The Chair: Thank you.

André Harvey is the last questionner before we go for a small in camera meeting.

[Translation]

Mr. André Harvey (Chicoutimi—Le Fjord, Lib.): Mr. Chairman, I had a question for the minister, but unfortunately he has left. Most of the questions have been asked. I simply wanted to stress the good work that has been done by departmental officials.

We often say what cannot be helped must be endured, but unfortunately, what cannot be helped has happened. I think that following what happened in the United States, all the security measures being taken will allow us to remain one of the safest places in the world. So that aspect is interesting.

My question is about the whole future of Air Canada in particular, and on the frame of mind that is driving the department. Even if Air Canada's legal status is not what it once was—it is now a private company—Air Canada remains a powerful symbol for Canadians.

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I would like to know what the department is thinking about everything we have heard recently on the subject of more private sector investment and the financial future of Air Canada, because Air Canada remains a very important symbol.

Thank you very much, Mr. Chairman.

[English]

The Chair: On behalf of the committee, I'd like to thank the officials for being here and answering our questions fully. The people of Canada appreciate all your work, despite some of the tough questioning by my colleagues. We are just trying to make sure that Canadians are safe. We appreciate the work you're doing. We're here to provide any help we can to enforce or strengthen the work you do.

I'll suspend for a quick minute, then the staff would like to check a couple of things with you with regard to our work plan. We'll go in camera.

[Proceedings continue in camera]