Point of View

In defense of the Senate
Minority follies are not majority rule

Since June, our parliament’s upper chamber has been pilloried in the news across Canada because of Senators Duffy, Wallin and Brazeau and their collective violation of rules governing expenses. Apparently, the three suspended senators thought their appointments entitled them to free use of the public purse. They thought wrong. Clearly, recent appointments to the Senate have not been carefully thought out by the Prime Minister and the process itself badly needs to be improved.

However, some people are suggesting the Senate be abolished. I disagree.

I do not favour wacky notions such as a “Triple E Senate” where all members would be elected, with equal representation from each province, supposedly to make it effective by giving them powers equal to that of the Commons. This would quickly lead to dead-lock between the elected Senate and the elected House of Commons, with each believing they would have the right to disagree with the other, more than likely bringing stalemate to our government.

I believe a great majority of current senators are diligent and do excellent work on Senate committees and in Senate debates. My conclusion from recent events is that the controversy shows the Senate is not only valuable as a venue for sober second thought and excellent committee work, but valuable, as well, for encouraging independent thinking and unfettered debate.

An example of the excellent committee work undertaken by the Senate is their report entitled, “The Future of Canadian Air Travel: Toll Booth or Spark Plug?” Prepared by the Senate Standing Committee on Transport and Communications, it speaks to the future growth and global competitiveness of Canada’s airports.

They reported on November 30, 2012. Their economic summary pointed out that “Canada’s vast land-mass, surrounded by oceans on three sides, and the population spread out across the country makes air travel essential for tourism, trade, business and connecting remote Canadian communities with the rest of the country and the world.” It continued: “Not surprisingly, the economic impact of Canada’s airports is substantial. Airports generate over $45 million in economic activity, and airport operations provide over 200,000 jobs, resulting in significant tax revenues for all levels of government.”

The committee went on to say that “nevertheless, Canada’s air travel industry has the potential to contribute more to Canada’s overall economic growth, but high costs and inefficiencies throughout the industry are deterring demand for air travel and discouraging competition among carriers.” They reported that Canada’s travel and tourism competitiveness ranking fell from fifth in 2009 to ninth in 2011. Millions of Canadians are opting to drive to American airports to take advantage of cheaper flights, rather than fly from their local Canadian airports.

After hearing from many witnesses over two years, the committee determined that “Canada needs a single, cohesive national air travel strategy, including an updated national airports system, to chart a new course towards increased air travel in Canada.” They stated that, “the Government of Canada should stop treating airports as a source of public revenue and start treating them as economic spark plugs.” To this end, they concluded that Canada should stop charging airports ground rent and transfer ownership of Canada’s main airports to the authorities that already operate them. Finally, they commented that the “federal government should use its influence to bring the relevant stakeholders to a common table to work out new policies and systems with representatives of government to address the inefficiencies the committee found and to continually improve the air travel experience in Canada.” They added that in coming months, there will be further reports covering different aspects of the Canadian airline industry, including the unique circumstances and challenges faced by small and regional airports.

When the National Airports Policy (NAP) was introduced in 1994, Transport Canada owned, operated or subsidized 150 of 726 certified airports in Canada. Under NAP, the government now retains ownership of the 26 busiest airports which handle 94 per cent of air passengers and cargo, but leases the airports to not-for-profit airport authorities to manage and operate. Regional or local and other smaller airports have had ownership transferred to regional interests.

The Senate committee report points out that since they have been leased to local authorities, those 26 busiest airports have generated $2.5 billion in revenues for the federal government in the form of ground rents.

The report further notes that in 2001, our air travel industry experienced dramatic changes because of the September 11 terrorist attacks. The cost of air travel increased as Canada established the Canadian Transportation Security Authority (CATSA), the crown corporation responsible for delivering air travel security.

The committee concluded that the Canadian travel industry is not well positioned to compete in an increasingly competitive global air travel market and is already contributing far less than its potential to our overall economic growth. It concluded that this industry “is simply plodding along without any direction or purpose” and that this has impacted the industry and needs change. They concluded, “a new national air travel strategy is needed!”

One of their most interesting findings is that a Canadian flight between major cities may be twice as expensive as a comparable flight in the United States. Passengers departing our airports often pay 60 to 75 per cent above the airline’s base fare for taxes and charges, compared to between 10 and 18 per cent in the United States. For example, on a typical Toronto departure ticket from Toronto to Orlando, a base fare of $118.00 results in a total charge of $207.53 because of taxes and other charges. Meanwhile, a typical Buffalo departure air ticket with a U.S. airline has a base fare of $124.00 and add-ons (taxes and other charges) of just $20.88, for a total cost of $144.88 – much less than its Canadian competitor.

Flying in Canada is expensive because landing a plane in Canada is expensive; Toronto’s Pearson International Airport is the most expensive airport in the world at which to land a plane. The high cost of flying here, the committee concluded, is directly attributable to government taxes and other charges, either paid by passengers directly or charged to airports or airlines and passed on to passengers. Indeed, in 2011, Canada was ranked 125th out of 139 countries by the World Economic Forum for ticket taxes and airport charges.

The committee reported the additional taxes and fees that contribute to the high cost of air travel in Canada include:

• The Air Travelers Security Charge to cover pre-board screening, checking baggage and other related security services provided by CATSA;

• The NAV Canada service charge covering air traffic control and related services;

• The Airport Improvement Fee to pay for airport infrastructure investments;

• The excise tax (federal and provincial) charged on aviation fuel.

Space does not permit me to go further on this issue, other than to recommend to interested readers that they contact the Senate Committee or the Library of Parliament if they wish to have copies of this interesting report.

This is just one example of the valuable work the Senate undertakes and is a convincing argument for the Senate to continue in existence while they deal with a small minority of malingerers who try to take advantage of their positions. As is apparent and just, they are being dealt with severely.

Honourable John C. Crosbie
About Honourable John C. Crosbie

The Hon. John C. Crosbie is a retired provincial and federal politician who was a regular Atlantic Business Magazine columnist from 1998 to 2008. He resigned to take up a new position as Lieutenant Governor of Newfoundland and Labrador. He rejoined us in November 2013 as an official essayist, offering his always-forthright point of view on topical issues.

Leave a comment

Your email address will not be published.