• CTF cautions airline bailout could set costly precedent for other industries
  
• CTF points out airlines were already in financial trouble before terrorist attacks
  
• CTF lays blame on overall government transportation policy
  
• CTF says full parliamentary and public debate needed on cost apportionment of new air safety security measures
  
• CTF demands full-blown fall Budget

OTTAWA: The Canadian Taxpayers Federation (CTF) has reacted to media reports indicating that representatives from the airline industry will be meeting with federal Transport Minister David Collenette tomorrow to press for government assistance to cover anticipated business losses stemming from last week's terrorist attacks in the United States.

A costly precedent
"While there is no doubt that last week's shutdown of North American airspace was unprecedented and resulted in an extraordinary business interruption for our domestic carriers, some careful and deliberate financial and policy analysis should be conducted before any decision is made," stated CTF federal director Walter Robinson.

"Important and fundamental questions must be asked," added Robinson. "Doesn't business interruption insurance cover such extraordinary circumstances And if taxpayers provide support for the airline industry, will courier companies, trucking companies, travel agencies, car rental firms, the convention industry and a host of other economic sectors also seek support for losses they incurred over the past week through no fault of their own "

The government could be setting a costly precedent by saying yes to the airlines for $3 billion or $4 billion dollars if media reports are accurate. This price tag could easily climb much higher if other industries also seek taxpayer support.

The global economic slowdown
"The government should also be mindful of the fact that the current global economic slowdown had already placed the airlines in some financial difficulty," added Robinson. "Taxpayers should not be asked to compensate companies for the natural vagaries of the business cycle."

Failed government policy
"What we are seeing now is partly the consequence of flawed government transportation policy," stated Robinson. "The government has sanctioned our basic one-carrier monopoly environment and consistently said no to cabotage - the entry of foreign carriers into the Canadian market - which has driven prices higher and made our domestic market uncompetitive vis-à-vis the opportunities for U.S. travelers. Why should taxpayers pay twice for bad government policy "


Time for a full debate
"Parliament must immediately engage the public in a national debate as to the costs of new security measures and proposals in light of last week's terrorist attacks," said Robinson. "If air marshals are established, is this a public good to be financed by all taxpayers or should costs be apportioned back to the airlines What about increased airport security Do we all pay or does a user fee principle through higher airport fees and/or ticket prices come into play These important questions need to be addressed."

Where will the money come from
"Finally, the tragic course of events of the last week has brought Ottawa's fiscal secrecy and lack of accountability back into the spotlight," said Robinson.

"We haven't had a budget in this country for almost 20 months. In response to serious fiscal concerns, Paul Martin has adopted the 'don't worry, be happy' attitude of his boss the Prime Minister. This stance shows a great deal of contempt and disdain for Canadian taxpayers," Robinson added. "The finance minister says money is available for security measures, but taxpayers want to know how much Where will this money come from What if the airlines get their bailout package, where will these billions come from Will it be from the contingency reserve or be re-directed from other budget envelopes How will all this impact the prospect for future debt and tax relief "

"This extraordinary situation points to the blatant need for a full-blown fall Budget. Taxpayers should not accept a 60-minute, glitzy dog and pony, PowerPoint driven, public relations show from the finance minister," concluded Robinson. "Plans for another say a lot, reveal nothing, flimsy economic statement are an affront to taxpayers. Given the gravity of our present situation, nothing less than a full budget will suffice."