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Proceedings of the Standing Senate Committee on
National Finance

Issue 34 - Evidence


OTTAWA, Wednesday, March 20, 2002

The Standing Senate Committee on National Finance, to which was referred Bill C-49, to implement certain provisions of the budget tabled in Parliament on December 10, 2001, met this day at 5:47 p.m. to give consideration to the bill.

Senator Lowell Murray (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, we have a quorum. Our witnesses are two cabinet ministers, the Honourable John McCallum, Secretary of State for International Financial Institutions, who has carriage of this bill in the House of Commons, and the Honourable David Collenette, Minister of Transport, who has the pleasant duty of administering the more substantive and controversial aspects of it.

The Honourable John McCallum, Secretary of State (International Financial Institutions) Department of Finance: Mr. Chairman, honourable senators, thank for the chance to appear before you on this bill.

I would like to cover two aspects. The first is the air travellers security charge and the second has to do with two strategic investments. I will leave the transportation elements of the bill to my colleague.

I would like to make a few points about the security charge. The total security charges in the budget arising from the events of September 11 were approximately $7.7 billion over five years, whereas the air security side is $2.2 billion. We thought it not unreasonable to ask the major users of airlines to pay for the cost of that additional security. It is not by any means the full cost.

The second point I would make is that for travel within Canada, the charge will apply to flights connecting those airports where the Canadian Airport Transport Security Authority will have authority for passenger screening and where security enhancements are planned. The charge will not apply to flights to or from remote airports.

The government is absolutely committed to reviewing this measure in the fall. If it appears that the revenues are likely to exceed the expenditures over this period of five years, then the government is committed to reducing the charge. We are also open to suggestions from parliamentarians and from the airline industry on the structure of the charge.

[Translation]

Regarding strategic investments, I now want to briefly discuss two of the strategic investments that were announced in the budget. The first establishes the Canada Strategic Infrastructure Fund, with a minimum of $2 billion in funding, to help meet the need for large infrastructure projects in Canada.

Working with provincial and municipal governments and the private sector, the Fund will provide assistance for large infrastructure projects in areas like highways and rail, local transportation, tourism and urban development, and water and sewage treatment.

The second strategic investment involves the $500 million Canada Fund for Africa that was announced to help implement the New Partnership for Africa's Development Initiative, which G8 leaders have pledged to support. The Canada Fund for Africa will establish a government program to provide funding for activities that are designed to help reduce poverty, provide primary education, and set Africa on a sustainable path to a brighter future.

[English]

I might add, Mr. Chairman, the Prime Minister has had some early indicators of success in trying to get the Americans and the Europeans onside, and will be visiting a number of African countries in the near future. Certainly, it is the intention that the Africa Fund, and other measures to assist Africa, which is certainly the most desperate continent on this planet, will be a great success at the G8 meeting.

[Translation]

The remaining measures in the bill further encourage the acquisition of skills and learning, enhance fairness in the tax system, and improve parental benefits under the E.I. program.

[English]

In conclusion, Mr. Chairman, the budget was developed at a time of crisis following September 11. There was a mood for strong action to improve security in air transport and also other areas. This is what the government has done.

At the same time, it was made clear in the budget that we have not forsaken our longer-term plans to reduce taxes and debt and to favour major social investments in areas of high priority, and in particular, from a Finance point of view, not to return to deficit.

We are on track in these areas.

The Chairman: Thank you, Mr. McCallum.

Mr. McCallum is a relatively new minister and a relatively new member of Parliament. I cannot resist sharing with you something from a profile that was written of him a couple of weeks ago in Maclean's magazine by Peter C. Newman. He writes:

When I interviewed him last week, McCallum was still suffering from the post coital glow of having been named to the federal cabinet...

I do not know whether he is still emitting that glow or whether honourable senators would be the best judges of it if he were.

Mr. Collenette has been around since 1974. He is the most senior privy councillor in the government after the Prime Minister. Therefore, he needs no introduction.

Welcome, minister. Thank you for coming.

Hon. David M. Collenette, Minister of Transport: Mr. Chairman, I can assure you that the glow is still present.

[Translation]

I am pleased to be here today to discuss the creation of the Canadian Air Transport Security Authority.

[English]

Since September 11, the government has spent about $100 million for enhancements of pre-board screening practices, heightened security at airports, purchase of explosive detection systems and a program of armed police officers onboard selected domestic and international flights.

It is now required that cockpit doors be locked for the full duration of flights. Screenings at airports now include additional features such as more secondary hand searches, screening for special objects like knives and a positive baggage-matching program.

We will soon be mandating new requirements to protect the flight decks of commercial aircraft. I am sure you are well aware of this because honourable senators travel and have been subjected to these new procedures.

As a country, we have always had an enviable record of aviation safety and security and we are committed to taking the necessary measures to keep it that way. This commitment is reflected in the budget, which announced our intention to create the Canadian Air Transport Security Authority and provide $2.2 billion in funding to implement its mandate.

First, I wish to reaffirm that Transport Canada will continue to regulate the provision of security services. We are dedicating new resources, including hiring additional inspectors, to increase the level of security in the air transport system by adjusting requirements, as appropriate, and ensuring compliance through an enforcement program.

[Translation]

The new Authority will be responsible for delivering a number of key air transport security services. It will be required to demonstrate that consistent, effective, and highly professional service is being delivered, at or above the standards set by Transport Canada regulations. This separation between the delivery of services and the regulating and monitoring of services respects the distinction between the two functions and enhances the checks and balances in the system.

[English]

The primary job of the new authority will be to provide effective, efficient and consistent screening of people, and their belongings, who have access to aircraft or restricted access areas at designated airports. The government will provide the authority with up to $128 million a year for pre-board screening services.

You may recall that pre-board screening is presently the responsibility of the airlines, which have been paying an annualized rate of approximately $100 million since September 11. The authority will immediately take over paying for pre-board screening from the airlines, thereby relieving them of this ongoing obligation.

The authority will have the power to recruit and deploy its own screening officers, enter into arrangements for local delivery with security contractors, or authorize airport operators to provide these services.

All screening contractors and screening officers, regardless of who employs them, will have to be certified by the authority on the basis of criteria that are at least as stringent as those for Transport Canada regulations and standards.

The authority will also be able to establish contracting policies to address certain basic working conditions such as wages and hour of work that can affect the ability of screening officers to do their job effectively.

In addition to certification and pre-board screening, the authority will be responsible for the acquisition, deployment and maintenance of explosive detection systems and conventional pre-board screening equipment at airports, contributions for airport policing related to civil aviation security measures, and contracting with the RCMP for armed police officers onboard aircraft.

The government will be providing the authority with more than $1 billion over the next five years for the purchase, deployment and maintenance of new explosive detection systems at designated Canadian airports.

I would like now to describe how the authority will be governed. The authority will be a Crown corporation, accountable to Parliament through the Minister of Transport for the delivery of consistent, effective and highly professional service at or above the standards set by Transport Canada regulations.

We will have a board of directors of 11 members appointed by government, of whom airlines will nominate two and airport operators will nominate two.

I should note that while there are many interested parties who will be affected by the operations of the authority, it is not possible to set aside a seat on the board of directors to represent each stakeholder group.

I have already committed that among the seven government representatives, there will be a person or persons sensitive to organized labour's goals and ideals, and similarly for the tourist industry and other affected stakeholder groups.

[Translation]

Like other Crown corporations, the Authority will be required to prepare an annual report and a summary of its corporate business plan to be tabled in Parliament by the Minister of Transport. The Auditor General of Canada will be the Authority's auditor, with full access to all information, data and documents of the Authority.

[English]

The target date for the authority to be up and running is April 1, 2002, should Parliament so consent. As of this date, the authority will begin to pay for the air transport security services under its mandate, including pre-board screening.

With the creation of the new authority, Canadian air travellers will benefit from effective, efficient and consistent screening at airports. In a few minutes, Mr. McCallum and I will be pleased to answer your questions, particularly in regard to discussions between Transport Canada and Finance that led to the $12 charge, as this has been the subject of some public discussion.

I underscore the fact that by March 31, 2002, the government will have already spent $100 million. That is money out the door without corresponding revenues. In addition, on April 1, the authority will assume the $100-million cost now paid by the airlines, which will ramp up by year's end to $128 million, largely because of higher salaries for screeners and better training. Finally, in fiscal 2001-02, the authority will pay out a further $200 million for ADS equipment. By March 31, 2003, federal outlays will be approximately $428 million that must be financed through the charge.

[Translation]

Senator Bolduc: Is the Minister of Transport being realistic when he says that the Authority is prepared to launch its operations in a week's time?

Mr. Collenette: Unquestionably, yes. The Department of Transport has already undertaken the preparations and currently, all airline company officials are poised to continue providing the service. The department has negotiated contracts with the airlines and with current management. The transition will proceed smoothly and existing contracts will be renewed until such time as new negotiations take place. The department is not anticipating any problems with the service.

Senator Bolduc: In other words, you are taking a group of Transport Canada employees and creating a Crown corporation?

Mr. Collenette: We are making preparations with government officials for the transition. We have taken two of our directors generals, namely those representing Quebec and British Columbia, and a team has been formed within the department.

On April 1, we will continue operating with the airport personnel already in place. However, in the coming months, we will renegotiate contracts and impose additional standards. We do not anticipate any problems resulting from the passage of this bill.

Senator Bolduc: Basically, employees will attend to operational duties.

[English]

Why would you create a government corporation to carry out operational duties instead of an administrative organization within the ministry?

Mr. Collenette: The cabinet took the position that obviously we had to improve security and that the status quo was not satisfactory.

When airline screening began in approximately 1971, it was the responsibility of the airlines. Obviously the airlines, especially in the recent environment, are interested in providing the service at the cheapest cost. There have been questions as to whether or not the quality of service was adequate. We believe that it could improve. We believe that security was good up until September 11, but those events required higher standards and better-trained personnel.

As a result, we decided to create, through this bill, a regime of federally regulated employees who will wear the same uniforms, offer a higher level of standard, receive better pay, and give greater assurance to the travelling public that their needs are being met.

[Translation]

Senator Bolduc: One way to bring employees salaries up to date is to take these employees out of the public service and make them part of a Crown corporation.

Mr. Collenette: That is one of the end results of this bill.

Senator Bolduc: However, as a Crown corporation —

[English]

I suppose an independent board will drive the operations along with the chief executive officer. Possibly, directives will be issued. The minister will be in a position to issue directives?

Mr. Collenette: That is correct in regard to security matters, but we will not interfere with administration. The board will be independently run and accountable to the minister through Parliament, but there will be safety-related directives. We are the regulator, and thus we will have the responsibility to direct the authority to improve standards, if that is our wish.

Senator Bolduc: In certain cases, there may be information that you would not want the Auditor General to bring before Parliament. We understand that. What are the criteria?

Mr. Collenette: The Auditor General has total, absolute and utter access to all documents, whether or not they are high security. There is a limit to information that the Auditor General or anyone else can impart publicly. We have not previously had armed police on planes. We do not wish to tip off any potential terrorists or others as to the frequency or the flights where these particular police officers would be present. However, that information must be made available, in confidence, to the Auditor General.

Senator Bolduc: Will your relationship with the authority be something like that between the Solicitor General and the RCMP, for example?

Mr. Collenette: I do not interfere in the day-to-day operations of Crown corporations such as VIA Rail. They must file business plans. The government can issue directives on transportation policy, but we do not interfere on a day-to- day basis.

I am not sure how the RCMP operates in relationship to the Solicitor General. Certainly, as a former Minister of Defence, I know how the military operated within the department. However, that was a different kind of operation. Within that department, there was a deputy minister and a chief of defence staff. One cooperates with this two-headed monster to try to divvy up the work.

In this case, an arm's-length agency will be receiving monies, will be charged with administering all of the security, and will report to Parliament through the minister. The Financial Administration Act governs its operations as a Crown corporation. The agency must obey The Aeronautics Act and any directives that either my officials or I make, but it will not be run out of the minister's office.

Senator Bolduc: As it is a Crown corporation, I suppose that in five years you will have a full review. As I read it, the review will apparently be internal; it will not be an independent review. The Auditor General will do it.

Is it that type of review common to all other government corporations?

Mr. Collenette: You have me there, senator, I am sorry. I cannot answer that question. However, we will get the answer for you.

Senator Bolduc: The authority will negotiate with contractors and subcontractors in various situations. If some information is confidential, how will contractors get a line of credit at a bank if they cannot disclose everything?

Mr. Collenette: Are you talking about security companies?

Senator Bolduc: Yes, security companies or contractors for the authority. They may have to deal with some contractors or subcontractors.

Mr. Collenette: The commercial aspect of it is not secret.

Senator Bolduc: Let us consider equipment for security purposes, for example, that might be fairly sensitive.

Mr. Collenette: The authority will be purchasing the equipment on behalf of Her Majesty. I do not see how your concern is relevant here.

Obviously, the contracts are commercially sensitive. They will not be made public, but they are subject to audit by the Auditor General.

The technical aspects of the equipment are also commercially sensitive. That will be between the authority and the manufacturers.

Senator Bolduc: Do you not see difficulties with, for example, a provincial audit of the contractors and other people involved? They have to pay income tax like everybody else.

Mr. Collenette: You are talking about security firms registered in a particular province that may be subject to provincial audit. I do not know why they would be.

Senator Bolduc: Would it not be for tax purposes?

Mr. Collenette: This happens all the time. There is a high degree of confidentiality respected between the federal government and provincial governments. The tax collection agencies have certain standards and they respect privacy.

Senator Bolduc: Do you not see a clash between your security directives and some provincial laws?

Mr. Collenette: No, because we have the authority under the Aeronautics Act. The provinces have no say in it whatsoever. It is totally discretionary on the part of the federal government. That is clear in the Constitution.

Who boards planes, who flies them and under what conditions, and who has access to airports, airport security passes and the like is simply within the competence of the Parliament of Canada to determine through the Aeronautics Act.

Senator Banks: Minister Collenette, just to be specific and further to the question that Senator Bolduc asked, there are audits and there are audits. Some Crown corporations are subject to a special examination by the Auditor General as opposed to an audit. I am wondering if, in your response to us later, you will let us know whether this particular Crown corporation will be subject to a special investigation of the type that the Auditor General performs on some Crown corporations every four or five years.

Mr. Collenette: Mr. Elliott tells me that the Auditor General will have the power to conduct not only regular audits, but also special audits. It is really in the hands of the Auditor General.

Senator Banks: Minister McCallum, I wish to ask a question about the charge. I refer to the definition of ``chargeable enplanement'' in clause 2 of the bill. You have probably seen a letter addressed to Minister Collenette from our colleague, Senator Carney.

Mr. McCallum: I have not.

Senator Banks: In that letter, she talks about small B.C. airlines, and we will hear more about that later. She gives an example that I believe is answered in the definitions. She said, for example, that Harbour Air, which is a small scheduled airline that flies between Vancouver and Thetis Island, would suffer badly from the imposition of this fee, which would be a disproportionate amount of the fare.

As I read the definition in the bill at 3(a)(iii), the enplanement charge does not apply if it:

is a boarding of an aircraft that is being used to transport, on a direct flight, the individual to a destination in Canada that is not a listed airport...

That is opposed to what you said earlier, which was to or from a small airport.

In the example, if I were flying on a scheduled airline from Vancouver to Thetis Island, I would be exempt from paying the fee and be subject to some form of inspection, I presume. That seems illogical to me. I would have to pay it if I were flying from Thetis Island to Vancouver because I would be landing at a designated airport.

To be colloquial, and only partly tongue in cheek, people do not get off airplanes with bombs on them. They get on airplanes with bombs on them. This seems to say that if I am leaving from a major international airport and flying to a small place, I am not obliged to pay the fee. However, if I am flying from a small place to an international airport, I am. That seems backwards.

Mr. McCallum: I will leave that to Mr. Dupont to clarify.

Mr. Serge Dupont, General Director, Tax Policy Branch, Department of Finance: Senator, I believe the definition reads ``an enplanement at a listed airport'' and you referred to the destination mentioned in the subparagraph. We are talking about the charge applying between two of the 89 listed airports. The charge does not apply on anything that does not involve a direct flight between these 89 airports. That is quite a different matter, however, from talking about whether there is security. That is simply the way that the charge will apply. As for departures from a particular airport and whether there will be security or screening, that is a function of the security measures that the Minister of Transport will implement.

Senator Banks: ``Chargeable enplanement'' means an embarkation by an individual. At a listed airport, in this case, Vancouver, I get on an airplane operated by a particular air carrier. Now I go to (iii), and I am boarding an aircraft that will transport me on a direct flight to a destination in Canada that is not a listed airport. I can get on a scheduled flight in Vancouver going to Thetis Island and not be subject to the charge?

Mr. Dupont: That is correct. That is not to say that you would not be screened, but you would not be subject to the charge.

Senator Banks: Even if I were screened?

Mr. Dupont: That is right.

Senator Banks: Can you give us a ``cartoon'' version of an airplane whose maximum certified takeoff weight does not exceed 2,730 kilograms? Can you give us an example?

Mr. Dupont: Senator, I do not have a cartoon version, but roughly, it would be an airplane that could carry about four passengers.

Senator Banks: Even if it were a scheduled airline?

Mr. Dupont: That is correct. It is a very small aircraft.

Senator Banks: I would like to talk about flights that originate outside Canada. On page 23, 14(4) seems to say that if I fly on an Air Canada flight from Los Angeles to Edmonton, for example, I am paying the $24 to Air Canada for embarkation in L.A. Is that correct?

Mr. Dupont: No.

Senator Banks: It says:

If an air transportation service acquired outside Canada is comprised of transportation of an individual by air by two or more designated air carriers ...

Perhaps I gave a bad example. If I fly from L.A. to Vancouver and then from Vancouver to Edmonton, do I not pay that charge, or do I pay it at Vancouver?

Mr. Dupont: The charge for tickets purchased outside Canada applies to the enplanement departing from Canada to the foreign destination.

Senator Banks: But not if I begin a round trip in the United States?

Mr. Dupont: Yes, it would, on the trip back to that destination.

Senator Banks: But only on the trip back.

Mr. McCallum: You pay the American fee for the flight originating in the U.S.

Senator Banks: I understand. Thank you.

Senator Kinsella: I would like to understand the public policy principles behind this air safety charge. Is it government policy that people who fly, the users, should pay for the security? Is that the fundamental principle?

Mr. McCallum: I tried to address that in my opening remarks. I do not think there is an absolute right or wrong in this question. It is what we judge to be reasonable. The total additional security costs contained in the budget amount to $7.7 billion over five years. Of that amount, $2.2 billion is related to air travel security, so that is 30 per cent of the total. We thought it not unreasonable to ask that the primary users and beneficiaries of this service pay the charge.

Senator Kinsella: You are able to demonstrate that for those on the ground who are put at risk from threats to airplanes because of the times in which we live, 60 or 70 per cent of the security cost is covered by other government safety programs?

Mr. McCallum: You could put it that way.

Senator Kinsella: The people in New York who met with such tragedy were not on the airplane; they were on the ground. You only charge the increased security fee to users who get on airplanes and fly, and it is the people on the ground who have to be secure and safe, which is a public interest issue. You are saying, and correct me if I am wrong, that the government is putting other monies in that represent some 70 per cent of the costs?

Mr. McCallum: This gets a bit philosophical after a while. If there were no air travellers, there would be no risk to those on the ground from the kind of event that happened at the World Trade Center. It is a judgment call that the primary beneficiaries of increased air safety are the travellers. It is true for those on the ground as well. As I said, the general taxpayer pays 70 per cent of the total additional security costs. We think it is reasonable that some fraction be charged to the air travellers.

Senator Kinsella: Is it correct that most of the capital equipment will be purchased in the first few years?

Mr. McCallum: Yes.

Senator Kinsella: In light of that, some are arguing that if the authority were able to pay over the life of the equipment — in other words, they could amortize the payment — there would be a very significant reduction in the cost. Some estimates are $330 million or $340 million in the first year or two. I have seen correspondence with the Minister of Finance from the Air Transport Association of Canada wherein they were proposing that the authority be allowed to amortize that expense and thereby reduce the cost of these charges or fees. To do so would require legislative authority for the authority to borrow money. What is your view on that?

Mr. McCallum: Mr. Dupont or Mr. Collenette may have more to add, but my understanding is that while what you say makes sense from a commercial point of view, the government is constrained by accounting rules set out by the Auditor General, and the Auditor General has confirmed that we cannot do that.

Mr. Dupont: Essentially, because the agency is a consolidated Crown corporation with its own books, amortizing these expenditures is one thing, but at the end of the day, when the Minister of Finance has to bring those expenditures into the consolidated books of the Government of Canada, they have to be recorded. The Auditor General has confirmed that those capital expenditures have to be recorded as an expense.

Senator Kinsella: It is my understanding that the Auditor General's office, in a letter dated March 7 to Mr. Clifford Mackay, president of the air transport association, has said that it could be done, provided the Canadian Air Transport Security Authority were empowered by its legislation to do so. It is also my understanding that a copy of this correspondence was sent to Mr. Louis Ranger, associate deputy minister of Transport, and Mr. Peter DeVries of the Department of Finance. If you are not familiar with this correspondence, then perhaps you could look at it.

Mr. Collenette: Mr. Elliott will answer your question.

Senator Cools: Mr. Chairman, before the witness responds, perhaps Senator Kinsella could share that correspondence with the rest of us so we too could be just as informed. Do we have a copy of it?

The Chairman: A copy was sent to me.

Senator Kinsella: I do not want to table it. You are asking if I wish to table it?

The Chairman: It has been sent to everybody, Senator Cools.

Senator Kinsella: Exactly.

The Chairman: Here is the copy. It is addressed to all the members of the committee.

Mr. William J.S. Elliott, Assistant Deputy Minister, Safety and Security, Transport Canada: The authority is empowered under Bill C-49 to borrow by virtue of clause 9, which gives it all the powers of an actual person. The authority, as the Minister of Transport has indicated, is subject to the Financial Administration Act.

I am familiar with the correspondence between ATAC and the Auditor General. I do not have the letter in front of me, but the correspondence indicates that in order for the authority to borrow, there would have to be a provision by an act of Parliament. In fact, since the authority is to be an agent Crown corporation, it is governed by the Financial Administration Act, which includes a power to borrow. As Mr. Dupont has indicated, it will be required to amortize capital expenditures, as it is subject to generally accepted accounting principles.

The difficulty behind the honourable senator's question does not have to do with the borrowing power of the authority or the accounting principles to be followed; it is with the accounting principles and practices of the Government of Canada.

Senator Kinsella: My final question relates to the Africa Fund. A number of countries that are providing aid to Africa, including Canada, are quite concerned with that aid's effectiveness. Indeed, the Prime Minister made a statement to the effect that democratic regimes are much easier to deal with when providing aid.

In the section of the act dealing with the Africa Fund, there is no outline of the kind of program evaluation that ought to be associated with the offering of these funds.

Minister, what type of program do you have in mind for evaluating the effectiveness of these funds for Africa?

Mr. McCallum: The point you raise is valid. Not all aid projects have done a great deal of good. The Prime Minister and the President of the United States both said this aid should be contingent upon the development of good governance in African countries. That is one way we hope it could be effective. The more governments can demonstrate they are moving towards democracy, transparency and human rights, the more money they will get.

There is intense discussion ongoing among G8 countries as to the exact properties and mechanisms of this fund. Final conclusions have not been reached and it will be one of the major topics for discussion at the G8 meeting in Kananaskis.

Senator Kinsella: On page 109 of the bill, 45(3)(2) speaks of the projects as outlined by the G8 at their Genoa meeting last July and adopted in its summit schedule for Kananaskis in June 2002.

In the French version:

[Translation]

Which will be adopted next June.

[English]

I find it somewhat strange that we are considering the adoption of a statute several months before a decision is to take place.

Senator Moore: Those are objectives, as opposed to eligible activities that will be fundable. That is the distinction.

Mr. McCallum: I do not find it strange at all, as Canada is trying to take a leadership role in promoting this major global effort to help Africa. If we do not put any money on the table, we will not be in a viable position to persuade colleagues to follow in a similar direction.

Senator Kinsella: How do we know what will be adopted in June?

Mr. McCallum: We do not. The bill is making money available for a new program that we hope G8 countries will adopt in June or July. We are working actively, in discussions with those countries and African countries, to design the most effective program.

Senator Bolduc: Only one page, minister, is used to ask for $500 million. That is not bad. What strikes me is the huge discretion of the minister. He has discretion to make deals with various African countries without an incorporated accountability system. We should have some statutory criteria so that we do not give money to dictatorial governments in Africa, Asia or elsewhere.

The Chairman: I invite the minister to bear that in mind and come to it later

Senator Cools: Before that, Chair, perhaps we could clarify the last matter that Senator Kinsella raised in respect of the letters. I would not want anyone to think I do not read my correspondence, but I have not received the letter to which Senator Kinsella was referring. I have asked my colleague next to me. He has not seen it either. Perhaps the clerk could circulate the correspondence to which Senator Kinsella referred.

The Chairman: The writer of the letter took responsibility for circulating it.

Senator Cools: Just let the record show that many of us have not seen that correspondence.

[Translation]

Senator Ferretti Barth: In part two of your submission, you mention the additional cost of airline tickets. I represent Quebec's Italian community, a total of 14,000 seniors who travel four times a year. Today, the majority of travelers are seniors. Did you not consider that in addition to the $24 tax travelers must pay to leave Cuba, they are also on the hook for a US$20 airport tax? Senior citizens, who manage their money very carefully, will now be paying an additional Can$100 for their airline ticket and an additional US$40 before they can return home. Did you not contemplate in your mega-bill a tax reduction for seniors? I find it unacceptable to make seniors pay this kind of money, considering that they have worked their entire lives to make Canada the best country in the world.

Mr. McCallum: We have been criticized both for charging seniors more and for making children who travel pay the tax. However, if we allow for too many exceptions, we will not generate any kind of profit. The beauty of this tax is its simplicity. The same tax applies to all travelers, be they senior citizens or children. Security costs have nothing to do with a traveler's age. I find this approach to be equitable.

As early as this fall, we will proceed to review our policies. We are open to any suggestions that could lead to improvements. We will also take into account the suggestions made today.

During the review process, certain conditions will continue to apply, namely that the tax must generate adequate revenues and any additional fees charged may not exceed $12.

Senator Ferretti Barth: Initially then, the amount charged will total $24.

Mr. McCallum: A total of $12 per flight will be charged.

Senator Ferretti Barth: You say that seniors will be charged this additional amount so that you can guarantee yourself a reasonable profit margin. In my opinion, seniors are always the ones left to pick up the tab.

We have to remember that the population is aging. Not everyone earns the same salary as a minister, Member of Parliament or Senator. Some people survive on their Old Age pension benefits alone. They allow themselves the luxury of one trip per year. It is not right to extract more money from them. Persons aged 65 and over should get a $10 tax break.

Mr. McCallum: We will take your suggestion into account when we conduct our review.

[English]

Senator Comeau: Mr. McCallum, you stated that small and remote airports would be exempted. I should like to take the question one step further and ask about airports that are not small or remote, but are not Pearson or Dorval. Airports such as Yarmouth, Fredericton, Corner Brook and Sydney are struggling to survive because they must pass on these costs to the airlines. The recent census indicated that many of these communities are in decline. People are moving to the major centres.

If you put another tax on the passengers who must travel out of those communities, people will simply drive the 300 or 400 miles to the bigger regional airports. These communities may perhaps lose their airlines.

Has a study been undertaken on the impact of this new tax on communities? If so, could you make that information available to us?

Mr. McCallum: We did not have detailed impact studies on a community-by-community basis at the time that the decision was made. That is because it was made quite quickly, in the aftermath of September 11. The public demanded action to improve the security of Canadians and airline travel. It was important to restore public confidence in the safety of air travel.

Second, we are committed to a full review of the level and structure of the charge in the fall. There are many permutations and variations that one could contemplate. The initial structure of $12 a flight is simple and logical. The cost of security is not a function of the length of the flight or whether it goes from Pearson to Vancouver or between two smaller airports. I am happy to defend this measure as one that had to be taken quickly.

Senator Comeau: Communities such as Fredericton and Yarmouth will become new victims of September 11. We continue to create victims.

I live in a community that has tried and is continuing to try to maintain an airport to be able to attract people there. You are familiar with the fable of the straw that broke the camel's back. If you start to add to the burden, you will lose infrastructure services.

If these communities could become victims of September 11, should we not back off right now and do the impact study before proceeding with this? Let us see what effect the flat tax will have.

Mr. McCallum: We must act now. The public wants us to act now. When we do the review in the fall, we will be able to consider a number of possible proposals, including a differential between big airports and small airports or between short flights and long flights.

We have made it clear that we are including exemptions for older people.

Senator Comeau: The fall may be too late for some of these communities; they may lose their airports by that time. However, will you give me a commitment this evening that if the tax impacts negatively on those communities, that you will remove it?

Mr. McCallum: I have made two commitments. First, we will look into the possibility of a differential fee for older people. Second, one of the options that will be looked at will be a differential fee that depends on the size of the airport.

Mr. Collenette: As Mr. McCallum said, in the aftermath of September 11, the main point was to improve security, to ensure that we had the best regime and that it covered almost all plane travel in Canada. That is why airports serving 99 per cent of all passengers in the country will be covered by the new security agency's mandate and will have to pay the fee. Certain exemptions were made in the North, based on a risk assessment. An airport such as Yarmouth is close to the United States and will not receive the same risk assessment as a small community in the Northwest Territories. We needed the best security with the widest coverage. As Mr. McCallum said, there is the issue of paying for it.

Airport viability is a subject of ongoing discussion. To date, not one airport that we have transferred has gone bankrupt or come close to bankruptcy. I admit that some airports are perhaps struggling, but they are paying their bills. The National Airports Policy and not-for-profit authorities have been very successful.

Implicit in your question is the point that Mr. Beddoe of WestJet has been making: If you are travelling from Yarmouth to Halifax or from Calgary to Kelowna, you are more likely to drive than pay the extra $12 charge.

Senator Comeau: That is right.

Mr. Collenette: I beg to differ, given the way traffic projections have turned around in the last three months, especially since about mid-December. That is a key point, because Mr. Martin and Mr. McCallum and those in Finance had to make a determination based on the data they had in the aftermath of September 11. We knew at Transport that passengers were coming back more quickly than in the U.S., and we suspected that air travel would pick up, but the Minister of Finance had to make a judgment. Therefore, the charge was determined as Mr. McCallum has explained.

Around December 12, we noticed the market coming back extremely well, particularly in people flying to sun destinations, but also in domestic travel. You will note that even Air Canada, which had been crying the blues and wanted a $3 billion or $4 billion public handout on September 12, is talking about breaking even at the end of this year, and traffic loads and yields are up. I come back to the specific point Mr. Beddoe made, which is implicit in your question. Are people going to say, ``I am going to drive rather than pay this $12 charge''? Based on what we are seeing now, the answer is no.

Mr. Beddoe has said to me — and I think he came to this committee; he certainly has been to the other senate committee studying Bill C-23, on the Competition Act — that he may have to adjust frequencies, depending upon the traffic.

I would submit that given the way the economy is coming back, the way Canadians are feeling reassured about the security system and the fact that we are not the United States, your concern, while justified in an absolute sense by the struggles of Yarmouth and other airports such as Charlo, is probably not justified. As Mr. McCallum said, over the summer months we will learn the true impact and adjustments can be made. I do not believe that the situation of any airport transferred under the National Airports Policy is so tenuous that it would face insolvency because of this charge.

Senator Comeau: It has been a few years since I took microeconomics, but I seem to recall a scientific expression, ``the elasticity of price.'' As you raised the price of certain items, people lost interest in your product.

I seem to be hearing that the law of elasticity does not work in the case of airports. Just keep on adding dollars to the cost of that flight from Yarmouth to Halifax or from Charlottetown to Fredericton or what have you, and there will be no impact on ridership. I think we disagree on that.

Mr. Collenette: Mr. McCallum is the expert on economics. He can discuss the principle of elasticity.

I would submit, given that airfares in real terms in 2001 were 10 per cent less overall than in 2000 because of competition, air ticket prices are coming down. The airlines will be relieved of at least $100 million of their costs. They say they have passed it through already. Some would argue that, especially in communities like Yarmouth. I would submit that if we are back here in September, Yarmouth will still be a solvent airport, people will still be travelling and your concerns will be shown to be not well-founded.

Senator Comeau: Minister Collenette did mention that ridership has increased since September 11. As I understand it, we are now back to what would be normal ridership on airplanes in general.

Mr. Collenette: Just a bit less.

Senator Comeau: It is also my understanding that the assumptions used to calculate the cost over the next five years were based on 30 per cent of the 2000 figure. In other words, you looked at 2000 completely wrongly.

What was the basis of your calculation of ridership?

Mr. McCallum: Thirty per cent is not the right number. It was a conservative assumption, but as I say, it was done in the aftermath of September 11, when air traffic had plummeted.

Senator Comeau: Could we get the number?

Mr. McCallum: We assumed 10 per cent lower.

Senator Comeau: Ten per cent lower than 2000?

Mr. Dupont: Ten per cent lower than 2001.

Mr. McCallum: We assumed it would be flat over the five years. The 30 per cent number appeared in a newspaper article, and the reason it is wrong is that the number of enplanements, the number of times people get on a plane, is not the same as the number of chargeable enplanements, so we had that reduction. It had nothing to do with traffic flows.

Senator Comeau: If the trend continues, there will be a surplus over the next five years based on that 10 per cent conservative estimate. What is your intention? Are you going to be passing it on, or could we reduce the $12 charge right now?

Mr. McCallum: We will have this review in the fall, and to the extent that we now think the revenues will be higher than the expenditures, we will reduce the charge. We have said that very clearly.

Senator Comeau: We are trying to avoid the same nonsense that occurred in the E.I. fund, the tax on jobs that created a surplus fund to reduce the deficit.

Mr. McCallum: Without accepting your premise about E.I., I repeat that there is a clear commitment by the government to have this review and to make this thing revenue-neutral.

Senator Comeau: We will be here.

Senator Tunney: In the event you are accumulating a surplus, will the percentages paid by users and by general taxpayers remain the same?

Mr. McCallum: No.

Senator Tunney: I do not know of any better method than you have devised. It is an irritant, but people should get used to it. They had better, because they are concerned about security.

Mr. McCallum: If you mean the $7.7 billion in total and $2.2 billion for air travel, that percentage will not necessarily stay the same. That is not the promise. The promise is that the money air travellers pay will not exceed the cost of the additional air security.

If, for example, the number of flights looks stronger and we revise our projections, we might be able to afford to reduce it to $10 or a lower number. That is what would change. The other, non-air-related security measures would not be affected by this review.

Senator Tunney: That is the right response to the question.

The Chairman: The ministers have had an opportunity to formulate an elegant answer to Senator Bolduc's statement about the excessive amount of discretion given to the minister in charge of the Africa Fund under this bill.

Mr. McCallum: It was the right thing to do, namely, to commit the funds well in advance of the G8 summit as part of our effort to get others to contribute. In my view, this is one of the best things in the budget.

At the time, we did not know the parameters and rules as to how this international effort to help Africa would play out. Those things are being developed right now in meetings between the Prime Minister and others.

By the time the money is disbursed, there will be a lot more information as to the checks and balances, the rules of engagement, and the means by which we will try to create incentives for these African countries to develop good governance, democracy and human rights.

Senator Bolduc: What strikes me, minister, is that it is the same philosophy as at CIDA. We give $2 billion a year — we used to give $3 billion — and there are no statutory criteria at all. It seems to me that in a parliamentary democracy like Canada, even though there is a tradition in Foreign Affairs that it is a prerogative of the Crown and we do what we wish and we sign treaties, et cetera, in the 21st century, there must be statutory guidelines.

Some of those countries are transgressing human rights every day. We had an example yesterday from the Commonwealth. Even the Commonwealth decided that it had had enough with Zimbabwe.

I cannot understand this in today's world. I can understand why, in 1948, Mr. Pearson did what he did. It is good politics for Canada to be present all over the place because we are a trading nation. One day, you will be in the opposition and I am sure you will have the same view.

Mr. McCallum: Maybe we are philosophically opposed on some of these matters. I am not saying that every dollar of foreign aid is a roaring success, but it should be a high priority. It is part of my values and the government's values that we want to help unfortunate people around the world. We want to build in incentives to improve governance, democracy and human rights.

Somebody asked about Zimbabwe yesterday. We want to penalize the Government of Zimbabwe, but not necessarily the citizens of Zimbabwe.

Senator Bolduc: That is why you should work with the NGOs.

Mr. McCallum: You can talk about these terrible governments, and I agree with you that we need to create incentives for them to improve, but at the same time, we want to try to avoid penalizing the citizens of those countries who have nothing to do with these despotic governments. That is another consideration. I am sure there will be further information as to the modalities of this African fund at the time of the G8 summit, and at other times.

The Chairman: You do need Parliament behind you, minister, not just for constitutional reasons, but also for good, substantive political reasons, if you want to do anything in foreign aid.

Mr. McCallum: That is true.

Senator Lawson: First, I have a positive statement for the minister. I have been flying in and out of Vancouver International Airport for 50 years, and for many of those years we were ashamed of and embarrassed by that airport. However, since it was turned over to the airport authority, it has become a world-class airport. Businesses have sprung up and thousands of jobs have been created. As to its management, it rates number one in North America and number four in the world. If the Ministry of Transport wants a jewel in the Crown for its policy, it is the Vancouver International Airport. It will generate the kind of revenue that will allow it to expand and send millions of dollars to the federal and provincial treasuries.

I have one negative note, however. A mile or two away is the Vancouver South Airport. They are making progress there too. The thrust of this bill is to improve security screening and so on. I understand, however, that at Vancouver South Airport, there is no security. After this legislation is passed, my understanding is there will still be no security. When the review is done in September, there will still be no security at the Vancouver South Airport. The small operators use it to service the coastal cities.

If that is true, and I believe it is, why would they not be exempted? I understand you exempt the helijets because they do not fly out of airports. That makes sense flying from Vancouver Harbour to Victoria Harbour, but in the case where there is no security and they are not going to get a nickel's worth of benefit from these fees, why would they not be exempted?

Mr. Collenette: First, Vancouver South Airport is all part of the same airport authority, and it is true that there is presently no screening at the south terminal. We are looking to institute screening. Some issues have been raised that concern me, which we will be taking up with officials, with respect to flying in and out of the south terminal.

For example, Pacific Coastal Airlines flies from Victoria into Vancouver South Airport and passengers will be subject to a charge. Passengers flying on the twin otters out of Victoria Harbour into Vancouver Harbour will not be subject to the charge. There are many such issues that we need to deal with, not only from the point of view of revenue generation — which is Mr. McCallum's concern — but in terms of airline competition and equity. We are discussing that with officials right now. I am glad you raised the matter. It is a point of contention.

Senator Lawson: If there is no screening by September, will you refund the monies?

Mr. Collenette: There is security, but no screening in the conventional sense. As I say, that must change, and quickly.

Senator Lawson: The proposed legislation contemplates that security services may be provided at airports in three different ways. First, the new Canadian Air Transport Security Authority may directly employ security officers.

If that happens, will they be eligible to join public service unions or private sector unions? Is this a Crown corporation? Is it a government agency? Do you have successor status in your agreements, meaning that public service unions would represent those people?

Mr. Collenette: There are no successor rights in this proposed legislation, which is a bone of contention with the Steelworkers' union, which represents many of the security workers.

Senator Lawson: It is not only the Steelworkers. I am troubled too, as a former labour person. It is in the Canada Labour Code.

Another way is to permit existing airport authorities to hire security firms. I understand the Steelworkers' union, and other unions, represent security firms working under contract. This is a new situation flowing from the bill. There are no successor rights. The airport authority could then say, ``Well, your contract with your union does not apply here.''

Mr. Collenette: Existing contracts will be respected. As the new agency applies the new standards developed by Transport Canada, all security companies may not qualify to offer service. The hiring entity, whether it is the authority directly or the airport authorities under subcontract, will obviously have to engage others to do the job.

If that happens, if the certified company is unionized, and I think most of them are, then that union benefits because its members are hired to perform the service.

Senator Lawson: Depending how it plays out, with no successor clause or deemed sale-of-business clause, they may have to start the whole transaction again.

This program will only be successful through the training, the skill, the goodwill and the commitment of the employees. If we can see some problems on the horizon that could be solved by a deemed sale-of-business or a successor clause, why would we not include that?

Mr. Collenette: The theory is, Senator Lawson, we want to make a fresh start on standards and certification. The people who do the job will be of a higher calibre, or at least better trained. That is not to denigrate the people who are there now. Many of the people working now may ultimately find themselves employed at a higher wage.

The issue is whether or not those companies that offer the services now are able to meet the more rigid certification. If they cannot, then the hiring entity, whether the authority or the airports themselves under subcontract, will be forced to tender another contract.

Senator Lawson: You refer to the Ministry of Transport standards?

Mr. Collenette: Yes.

Senator Lawson: I do not disagree with that. If they do meet the standards, we should try to give as much protection as possible to those already established.

Mr. Collenette: They are protected, in a sense. Say, for example, an existing company meets the standards and there is a new contract. Obviously, those employees who meet the standards will benefit from the higher wages. Those who do not will have to be let go. Certainly, the unions will recognize that there are some employees who can meet the new standards and others who cannot.

Senator Lawson: In some cases, depending on how this plays out — and I think it will happen, although I hope it does not — some of those unions that meet the higher standards may be disqualified as a result of their certification, with no successor rights.

Mr. Collenette: We do not believe that to be the case. Mr. Chairman, as I am up against an expert in labour law, perhaps I could provide some written answers to the senator's questions.

Senator Lawson: That would be satisfactory.

You say in your statement, Mr. Collenette, that there will be a person or persons sensitive to organized labour's goals and ideals on the board of directors.

Does that mean that you may have union or non-union representatives of the workers on the board of directors? I know you are sensitive to their needs.

Mr. Collenette: We are looking at resumés right now, but we cannot appoint anyone, even the chair, until Parliament actually passes the bill. However, we are looking at ensuring that one or more of the individuals appointed would indeed have an empathy with labour's goals and be someone with whom the labour movement is comfortable.

Senator Roche: I would like both ministers to know the intense respect in which I hold them both.

Mr. Collenette, it has been said here that there was no time for a study on the economic impact of the tax. I hope we will not quarrel over the use of that word. I have had a running discussion with Senator Cools on it.

There has been no time for a study; yet it has been said tonight that there was a study on traffic projections.

I have difficulty understanding why, if it was possible to do a study on projections, we could not have done one on the economic impact.

Are you open to an amendment to this bill that would exempt senior citizens and youth under a certain age? I believe this bill is manifestly unfair to senior citizens and to youth, particularly to the grandparents of this country, who pay for visits back and forth with their grandchildren, particularly in the summertime.

In Alberta, the economic impact on Edmonton and Calgary is manifestly unfair. It is true that one could drive between them if one is willing to drive for six hours, plus conduct one's business. It is much more convenient to take a plane, but the extra $24 will have a deleterious impact on the ability of some businesses to function well economically. I believe that an economic impact study on this bill would have brought out the economic consequences for places such as Edmonton and Calgary.

A study would have brought out the unfairness in charging senior citizens and youth a tax of this nature.

While it has been said here that passengers have to pay some proportion, 30 per cent is an arbitrary figure. There is no economic impact study to show that that 30 per cent is appropriate.

Charges for airport security in the United States are between $2.50 and $5 per ticket. I find it astounding that the Government of Canada would arbitrarily impose a charge of $24, irrespective of the economic impact on certain areas of the country and on people of the country such as senior citizens and youth.

Senator Cools: Mr. Chairman, before the ministers respond to that, perhaps I could inquire from Senator Roche where he is headed. It seems to me that the bill already answers his question. The bill already enables the ministers to do precisely what Senator Roche is asking. From my reading, no amendment would be necessary.

Perhaps Senator Roche should explain what other authority would be needed, since to my mind it is all there.

Senator Roche: Even though my grandparents came from Ireland, I am willing to answer the question of Senator Cools. The purpose of these excellent ministers is to answer legitimate questions concerning the principles of the bill and to signal whether or not they are open to amendments, Mr. Chairman.

Mr. Collenette: Most of the questions you asked, Senator Roche, concern the charge. This is a user charge. Therefore, Mr. McCallum can have the pleasure of dealing with how we arrived at the charge.

With respect to the issue of penalizing people travelling between Edmonton and Calgary, I believe I answered that in response to Senator Comeau's question. I do believe that many of the concerns are misplaced. I think we will see that over the summer.

On the general principle of user pay, which the government has followed, when you fly, you pay NAV CANADA fees at a flat rate. You pay airport improvement fees. It is $15 at Pearson Airport; it is $10 or more at Vancouver; it is $10 in Montreal.

You pay landing fees. Air Canada and Canada 3000 have imposed fuel surcharges, although WestJet did not. These were all flat fees, regardless of who is travelling, be it a senior citizen or a student.

Our experience in recent years, as we have shifted the cost of the airline system to the users, has been that this is one element of transportation where the user has been able to pay and has financed all those great improvements. In fact, Senator Lawson was talking about the wonderful improvements at the Vancouver airport. The public has been, and is, willing to pay. Given our experience, I do not think that one can start delineating different classes of passenger.

I may be treading on the preserve of Finance, but user charges and user fees have worked in the airline system. There is no reason to believe that this particular charge will be accepted any differently.

What has really brought it to the fore is the argument that ATAC, WestJet and others have made about a flat fee versus a graduated one. We had discussions with Finance about that, and the Minister of Finance had to make the call in a very difficult environment. As Mr. McCallum, Mr. Martin and I have said in the House many times, the government is prepared to review the charge.

Mr. McCallum: Fairness is often in the eyes of the beholder. I think a flat-fee charge is fair in the sense that the cost of the additional security is a flat cost. It does not depend on whether you are old or young; it does not depend on whether you are flying 3,000 miles or 50 miles. If fairness is defined as paying in accordance with your usage of the service, which is what a user charge is, it is fair. However, there are other factors. For other reasons, you might say it is unfair to charge the young or the old or those taking short flights. I have already said several times that these are possibilities we will look into when we review it. I am certainly prepared to defend it now as fair in the sense that I have defined it, but there is no doubt we can refine it in various ways, and hopefully lower it, when we conduct the review in the fall.

Senator Roche: Mr. Chairman, these hearings are useful since the point is being made that there is a feeling in the country, which has been expressed at the table here tonight, that the flat fee is not fair and that grandparents and youth in particular are being unfairly treated. It is fine to refine it later, but I find the defence weak. I took from your answer that you are not open to an amendment and that you are looking for refinements as we proceed. I suppose I just have to accept that.

I will direct my second question to Mr. McCallum. It has to do with Africa. I want to declare my total support for this part of the bill. This is tremendously important, and I commend you on it.

Why is it tucked into this bill? I know that omnibus bills have various things tucked into them, but this bill is wildly discordant. You have money coming into the system via this airport initiative and you have money going out of the system on the Africa initiative. I do not know how those can be reconciled in one bill. I have great trouble understanding this, although I have been around here for a long time.

Mr. McCallum, would you be supportive of a move to split the bill so that the Africa section could stand on its own merits? Why cannot the Canada Fund for Africa stand on its own? I am in the position where, were I to vote against this bill on the airport initiative, which I do not like, I would be also voting against the Africa initiative, which I do like.

Why have these two wildly discordant issues been conjoined in the same bill? Would you be amenable to splitting the bill in order that the Africa section could stand on its own and the people of Canada could get a better understanding of the initiative? In that way, they could start to think about what the Government of Canada is doing for Africa, rather than dealing with it in about a page and a half, which is insufficient treatment, given the importance of the subject.

Mr. McCallum: Thank you very much for your support for the Canada Fund for Africa. As to why all these various things are in the same bill, the simple answer is because they were in the budget, and a budget always contains a variety of measures, depending upon the needs of the day. Clearly, in December, one of the needs was to introduce the security measures, which is why they are included. Another issue in the budget was to provide funding for the Canada Fund for Africa and for the infrastructure program. That is why they are included. It is not some Liberal plot to prevent you from voting on them separately. It is because those are items in the budget and this is a budget implementation bill.

The Chairman: We understand omnibus bills, of course, and in this bill you are amending a variety of other statutes — the E.I. Act, the Income Tax Act and so forth. That is normal. However, it intrigues me that Part 5 is almost an act within an act.

I am sure the officials will tell us that there are precedents for this.

Mr. McCallum: That point is more technical than I am capable of answering. I do not know why we have an act within an act.

The Chairman: It is not an amendment of an existing act; it is a whole new act.

Mr. Dupont: If and when this bill is passed, these acts will have a life of their own, on separate tracks. If, for one reason or another, it is necessary to bring back the act concerning the air transport authority or the air security charge, it will not be necessary to, at the same time, bring back the Canada Fund for Africa or some other parts of this bill that do not relate to one another.

The Chairman: You will get only one Royal Assent, will you not?

Mr. Dupont: I have been told by colleagues who have been at this longer than I that it is not unusual.

Senator Roche: I take it from that, Mr. McCallum, that you are not interested in pursuing making the Canada Fund for Africa Act an independent act standing on its own so it can achieve more visibility with the people of Canada?

Mr. McCallum: It will be, as we just heard. After passage, it will take on a life of its own as a separate act, and will get a lot of visibility because of the G8 meeting being held in Canada. The Prime Minister is certainly attaching huge priority to this.

I do not think Mr. Collenette would be very happy with a delay because we want the transportation measures to become effective on April 1.

Mr. Collenette: We are also talking about other acts being created. Part 1 concerns the proposed Canadian Air Transport Security Authority Act; Part 2 is the proposed Air Travellers Security Charge Act; Part 5 is the proposed Canada Fund for Africa Act; and part 6 is the proposed Canada Strategic Infrastructure Fund. The point is that it is quite normal to announce a new initiative, new law or a new agency in a budget and then put it in a budget bill.

The Chairman: I appreciate that, Mr. Collenette. We are accustomed to seeing the amendment of many different statutes in an omnibus bill. However, here we have the creation of many new statutes for which there will be one Royal Assent.

Mr. Collenette: That is not without precedent, Mr. Chairman.

The Chairman: I take your word for it. That is the answer that is always given, and I believe you. However, we might want to take a look at that sometime.

Senator Lawson: Early in the life of Vancouver International Airport, the airport authority conducted a poll to ask people how they felt about the airport improvement fee. They said they liked it. It was because they were proud of the improvements.

They also liked it very much because hundreds of thousands of non-Canadians were contributing.

The Chairman: I hope I will be able to say the same thing in Cape Breton, one day.

Senator Cools: I want to apologize to Senator Roche.

Senator Roche: No problem.

Senator Cools: I would like to thank the two ministers, particularly since they are both from Toronto. It is a wonderful treat to have two ministers from Toronto, because that happens rarely.

I admire the ease with which you conversed with senators, and I was appreciative of your willingness to respond to some profound concerns that have emerged at this table. I especially thank the two ministers for their undertakings, particularly in respect of the fall review and the continuing commitment to looking at this new charge in relationship to all the facts as they unfold. I am sure the ministers are well aware that the amount of the charge has been vexing to many senators. I am pleased that the ministers addressed those issues head on.

In response to our colleague's concerns about dividing the bill into several bills, there is no such proposal before the committee. The good senator has been asking the ministers how they will respond. I know of no such proposal to date.

The Chairman: Do not tempt them.

Senator Cools: I am not too sure. That is speculative. Our submissions are entirely helpful.

In any event, Minister McCallum and Minister Collenette, these are difficult circumstances and issues around a complex and difficult bill. I thank you for that, gentlemen.

The Chairman: I cannot improve on that. Thank you, ministers, and thank you, colleagues.

Senator Cools: I have a motion to do with the airline pilots.

Honourable senators, I have before me a request from Mr. Laflamme, a senior representative of the airline pilots. Senator Murray, Senator Banks and I, with the committee, made decisions about witnesses. We did not include this particular organization or this particular representative. Therefore, I move that we include Mr. Laflamme and his group on our list of future witnesses and that we find an appropriate time to fit them into the schedule.

The Chairman: Is it agreed, colleagues?

Hon. Senators: Agreed.

The committee adjourned.