Taxpayers Federation blasts any Government bailout plans for Air Canada

OTTAWA: The Canadian Taxpayers Federation (CTF) has reacted to news from Question Period today where federal Transport Minister David Collenette hinted that the Government of Canada is open to buying shares in Air Canada. During Question Period, the following exchange took place:

Mr. Rex Barnes (Gander-Grand Falls, PC): Mr. Speaker, Air Canada is in trouble. Could the Minister of Transport inform the House whether the government is considering any scenario where they will buy shares in Air Canada

Hon. David Collenette (Minister of Transport, Lib.): Mr. Speaker, the situation facing the aviation industry worldwide is extremely serious. Of course Air Canada is not exempt from that. We have seen what is happening in the United States. We are continuing to work with the industry. We are monitoring the situation, and in particular with respect to Air Canada, we are prepared to discuss with them any options that might make the situation better.

Government policy has crippled domestic airlines
" Since David Collenette became Transport Minister, eight airlines have disappeared from the Canadian aviation landscape. The problems that now plague the domestic airline industry can largely be attributed to his government's policies that have taxed the industry to near death and crowded out large scale competition," said CTF federal director Walter Robinson. "Thoughts of direct taxpayer assistance for any airline should be grounded immediately. This idea is a dangerous flight of fancy."

The proper way to assist the domestic aviation market
" Instead of hinting at a bailout and in effect providing corporate welfare for Air Canada, Ottawa should eliminate its flying tax, drastically reduce unjustified airport rents and slash the tax on aviation fuel," added Robinson. "These measures would benefit all carriers, including Air Canada, and signal to the industry that the federal government has realized the error of its flawed aviation policy ways."

"Returning to the old days of government ownership of domestic air carriers is a patently ludicrous suggestion. Minister Collenette should clarify his remarks and back down from this position immediately," concluded Robinson.