Bill C-33 (Historical)

Protecting Air Service Act

An Act to provide for the continuation and resumption of air service operations

This enactment provides for the continuation and resumption of air service operations and imposes a final arbitration selection process to resolve matters remaining in dispute between the parties.

Protecting Air Service Act

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, what I find unreasonable and unacceptable is the lack of respect the Conservative government holds for organized labour in this country. It is absolutely the prerogative of the membership to not support a contract that is brought back by the executive. The power lies in the hands of the membership. It is not the big corporate bosses. It is not big union bosses. They simply negotiate the deal, bring it back to the membership and if the membership rejects it, it is well within their democratic right.

[Denis Lebel, Conservative, Minister of Transport]

Mr. Speaker, I will be sharing my time with the member for Simcoe—Grey.

I am pleased to have the opportunity to address the House regarding the Air Canada labour dispute. I would also like to take this opportunity to describe in more detail the role of Air Canada and the airline sector in our economy. The air transportation industry and the economy are intertwined because there is a direct relationship between the demand for airline services and economic and socio-economic activity in general.

Consequently, this sector is an excellent gauge of the economic situation. We know that the economy was seriously impacted by the global financial crisis three years ago. Activity slowed down and airlines reacted. Costs were cut as much as possible, but the carriers still had to cover them.

As indicated by the strength of the Canadian dollar, Canada was protected from the worst repercussions of the recession by its relatively solid financial system and fiscal stimulus measures. However, three years after the global recession, the economic recovery remains fragile. The International Air Transport Association, IATA, reported last year that the Canadian and North American airline industries had posted modest profits, primarily because of their efforts to contain costs.

This industry and the economy are intertwined and, to date, their future is somewhat uncertain. This same association stated on September 20, 2011, that the profitability of international carriers, including North American carriers, should diminish, which quite logically could compromise the short-term financial health of these same airlines.

As we have seen in the last several weeks, economic indicators, stock markets and international financial markets remain fragile and continue to falter.

In the short term it is expected that the pricing and revenue environment in the airline industry will remain uncertain due to the fact that airlines have to deal with travellers who have less money to spend and who increasingly expect regular seat sales. This will result for the industry in profit margins that will remain modest at best.

I would like to share with the House some figures that speak volumes, that speak to the importance of the transportation sector and the air sector to our economy. In its 2010 annual report entitled “Transportation in Canada 2010”, Transport Canada indicated that the airline industry employed 91,146 people across the country. The transportation sector employed 912,400 people. Air Canada employed 23,200 people in 2010, providing 25% of the industry's jobs.

In 2010, the airline industry's contribution to GDP was $5,796,000 in 2002 dollars, or 0.5% of Canada's GDP. A work stoppage at Air Canada would be problematic for Canadians because, on average, over 100,000 people travel with Air Canada or one of its regional partners every day.

Air Canada offers connections between 155 city pairs and up to 313 city pairs if one takes into account its regional partner carriers such as Jazz, Air Georgian, Exploits Valley Air Services, Sky Regional and Central Mountain Air. Service interruption at Air Canada would thus have implications across the country.

Air Canada also operates a large number of international flights to 42 countries on five continents, including destinations that are key economic partners for Canada.

According to Air Canada's 2010 annual report, as a major economic player in Canada, Air Canada injects significant sums of money into the economy through its operating expenses. Every year, the company spends close to $1.9 billion on employee wages, salaries and benefits, $961 million on airport and navigation fees, and almost $677 million on aircraft maintenance. Our airline industry, especially our carriers, are defined by the unique characteristics of the Canadian market: multiple hubs, long distances between scattered populations, harsh winters that encourage people to vacation in the south, the importance of an air transportation network in the north, the seasonal nature of travel, climate and proximity to one of the world's largest markets, the United States.

Canada's unique context should be an important consideration. The economic climate of the past three years was a tough ordeal for the industry and for Canada's strategic air services framework. Even though the recession is technically over, we are still feeling its effects. Recently, the Minister of Finance stated that the economy remains fragile, which means that we must remain vigilant and prudent.

During the recession the airlines proceeded with caution and limited or reduced excess capacity in order not to flood the market with air services, which could have initiated price wars and ultimately contributed to a further destabilization of the industry.

It is important to understand when considering the specific variables that the airline industry is subject to seasonal fluctuations. For example, in Canada most of the revenue of air carriers, and by default those of their partners, is realized during the spring and summer. Revenue earned during these seasons largely offsets the high costs that characterize the airline industry. Fuel is a key factor in this industry and it is one of the largest and most volatile operating expenses.

The reality of the airline industry involves high costs and small profit margins, even at the best of times. However, when these services are reduced, interrupted or cut, the partners that work with carriers, communities and consumers feel the impact.

A drawn out labour dispute at Air Canada would be bad news for the company, its business partners, its employees, Canadians who travel with the airline and, by extension, our economy. At a time when consumer confidence in the airline industry is being rebuilt little by little, a prolonged work stoppage at Air Canada could have a significant impact on the company's return to profitability. The same consumers could also find themselves trapped at airports across the country and abroad trying to make alternate travel arrangements in place of their Air Canada flights. Flight cancellations would be expensive for both the company and for passengers who would have to make alternate travel arrangements that could be very costly.

In conclusion, the government is taking a responsible and measured approach by making the necessary arrangements to ensure that the country's largest air carrier continues its operations, while encouraging the parties to continue their negotiations in order to reach an agreement that is fair to both parties as soon as possible. That is why I support any government initiative to block a work stoppage at Air Canada.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, over the weekend, I met an Air Canada employee who said that he was fed up because he is unable to buy a new car or a new house and because he does not make enough money to live comfortably.

The Minister of Labour is saying that the entire community and the whole country will benefit from this bill on the resumption of air service operations. What does the minister have to say to workers who are fed up with not making enough money to live comfortably?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Mr. Speaker, we are not going to talk about one isolated case. I do not think that Air Canada employees are the worst paid in the country. That being said, I recognize that all workers deserve the salaries they earn.

I also work in Ottawa and, like a number of the hon. members in the House, I travel by plane every week to go home. It takes two flights because there are no direct flights to my region. Every week, I meet employees of airline companies such as Air Canada, Air Canada Express and Jazz, and all they want is to do their work well and provide services.

When two unions, the pilots union and the machinists and aerospace workers association, have been negotiating a collective agreement for 18 months, but cannot reach an agreement; when both bargaining committees recommend accepting the offers proposed by the bargaining committee but the workers reject their recommendations; then it is clear to our government that the parties are not prepared to reach an agreement and it makes the decisions necessary to protect the Canadian economy.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I have a very simple question for the minister. Does this government think that air transportation for passengers is an essential service? The way it has handled this file over the past year seems to indicate that it considers it to be an essential service, but it will not go so far as to say so. Is it an essential service or not?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Mr. Speaker, in 2010-11, there were 302 instances of collective bargaining in federally regulated businesses, and no bills were introduced. No action was taken. We want to always foster the mutual resolution by union and management of any discussion and any dispute. Naturally, air transportation is a very important component of our economy. I would like to remind my Liberal colleague that they used similar laws on several occasions when they were in power.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Mr. Speaker, with your permission, I would like to ask the minister a question. In his opinion, what effect will an Air Canada work stoppage have on Canada's fragile economy? Can he explain why we should expedite approval of this bill today?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Mr. Speaker, the Minister of Labour previously referred to Air Canada's 26,000 employees and many others who are indirectly dependent upon it. Air Canada needs food and other services as well as aircraft maintenance. Thousands of workers would not be able to work. There is a very significant direct economic impact every week. Last year, Air Canada had a budget of $1.7 billion and direct weekly spinoffs of $22.4 million.

I heard an NDP member say that $22.4 million was not a very large contribution to the economy. We find that it is quite sizeable. It is very direct.

The union has made a decision. Why introduce such measures when more than one million Canadians are on school break? We made a decision to support Canadians. This evening are still hoping that the union and management will come to an agreement.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, today I hope to help hon. members present in the House understand why the Government of Canada is getting involved in the two most recent Air Canada labour disputes that threaten to disrupt air travel. Since the 1980s deregulation of the Canadian airline market, there have been six work stoppages involving Air Canada. History has shown us that these stoppages have taken a significant economic toll and disrupted the lives of Canadians, passengers and business entrepreneurs alike.

Once again we are faced with the possibility of a work stoppage at Air Canada, and once again we face potential economic damage and disruption to Canadians. Parents in my riding of Simcoe—Grey who are away on March break are quite anxious and concerned about this uncertainty and disruption. As the saying goes, those who do not heed the lessons of history may repeat them. At a time when our economic recovery is still fragile, the Government of Canada must act to protect the economy and air services. Up to now, the news about employment in Canada has been encouraging. We have recovered all the jobs that were lost in the recession and created some new ones. Do we really want to take chances with our economy?

The point is that work stoppages can be very costly, especially if they occur in a major industrial player such as Air Canada. They have the potential to cascade down through other sectors, hospitality, food, travel, manufacturing, public relations and marketing. It has been estimated that losses to all sectors of the Canadian economy could easily add up to about $22.4 million a week, for every week a stoppage drags on.

Then there is the impact on jobs. Air Canada is a major employer of almost 26,000 full-time workers across the country. There are also about 250,000 employees indirectly related to Air Canada. There are a lot of employees and their families who would be affected by a work stoppage. A work stoppage involving half of Air Canada's employees, approximately 3,000 pilots and 8,200 machinists, baggage handlers, technicians, mechanics and support workers, for a total of over 11,000 employees, would cause a major disruption and stop air services. The airline risks losing too much money in business transactions and productivity. The elements of the air service system are interdependent. If one element is weakened, they are all affected.

It is no surprise, then, that if jobs are lost at Air Canada, there will be jobs lost at Air Canada's partners and suppliers. According to Transport Canada, over 50% of airport revenues are attributed to Air Canada and its related activities. It stands to reason that any reduced operation at Air Canada will adversely affect Canada's airports and Air Canada's third-party suppliers. Canadian businesses could be impacted again while they are still struggling to shake off the effects of the recent economic downturn.

Why are we here? Surely it would preferable to let Air Canada and its employees, represented by the Air Canada Pilots Association and the International Association of Machinists and Aerospace Workers, work it out for themselves. Yes, it would, but I ask what happens when the parties in the dispute cannot resolve their issues on their own? What happens when the tentative agreements are rejected by the union members?

What do we do when we have exhausted all the avenues, such as direct negotiations, conciliation and mediation, with no solution in sight? I will tell the House what we do. We do what the Minister of Labour is recommending. We take action. We act on behalf of Canadians and in the best interests of the Canadian economy. We put an end to all the uncertainty and doubt there is right now and ensure continued air services. We bring in legislation, like Bill C-33, an act to provide for the continuation and resumption of air service operations.

It will soon be one year that the collective agreement of the two unions has expired. Where are we today? On February 22, 8,200 members of the International Association of Machinists and Aerospace Workers voted by a margin of 65.6% to reject the tentative agreement that had been negotiated with Air Canada with the help of a conciliator appointed by the Federal Mediation and Conciliation Service. Shortly thereafter, it was announced that 78% of those members had voted in favour of a strike. The union advised that it would be intending to begin legal strike action on March 12, 2012. As for the Air Canada Pilots Association, it recommended to its 3,000 members that they reject the most recent offer by Air Canada, and on March 8 Air Canada advised that it intended to legally lock out all of the members on March 12, 2012.

In terms of labour relations, this has been a busy year for Air Canada. Members will recall that in June 2011, Air Canada finalized a four-year collective agreement with its customer sales and service agents, but this happened only after there were three days of labour disruption and the tabling of back to work legislation. In October 2011, Air Canada reached an agreement with its flight attendants, but only after the Minister of Labour referred the matter to the Canadian Industrial Relations Board and the parties agreed to arbitration. However in February there was a bright spot as Air Canada ratified agreements with two CAW-Canada units and the Canadian Airline Dispatchers Association bargaining unit.

The Canada Labour Code recognizes the principles of freedom of association and free collective bargaining. The code gives the parties in labour disputes many ways and opportunities to reach a settlement with or without the help of the federal government.

The Government of Canada respects the rights of unions to strike and the rights of employers to lock out their workers. When a work stoppage could undermine the national economy, Parliament must respond to protect the public interest.

The stakes are even higher today given the fragility of the global economic recovery. Every day of lost business could have an impact on the bottom line of a company that has been struggling to stay solvent for most of the past decade. The viability of a company is important to many people normally served by Air Canada. Some of these customers do not have easy access to an alternative carrier, and even if they get a seat on another airline, they may face long waits or more costs. The lives of hundreds of thousands of frustrated travellers could be disrupted. In fact during this busy March break period, over one million people are scheduled to travel with Air Canada. That is a lot of Canadians and a lot of Canadian families with disrupted or cancelled travel plans.

That is why we need Parliament's support. We have a duty to balance the rights and interests of employers and unions with those of the broader Canadian public. The need for legislation is clearly demonstrated when we consider the needs of 33 million Canadians.

There is really very little to debate here. We must do what is right for all Canadians and the Canadian economy. I am calling on all parties to give the legislation speedy passage so that we can restore peace on the labour front and get back on the road to economic recovery.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, in her presentation, the member said that they had done everything, negotiating for one year and going through the arbitrator and conciliation and everything.

Now the government is saying that it has no choice, but the Charter of Rights gives workers the right to vote, including a vote to strike, just as any other Canadian or worker has. The Conservative government is taking those rights away.

I have heard the Minister of Public Safety say he is the type of guy who likes the law to be followed, but is this not a law in our country? If the government believes so much in the economy, what did it do with Caterpillar in London when it locked out its people and left with the government's money? It did nothing to help the economy of London, Ontario.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Mr. Speaker, as I have said before, the best solution is one that the parties reach themselves. Despite very hard bargaining over the last number of weeks, the parties have actually failed to come to an agreement.

That is why last Friday, in an effort to protect the Canadian economy, we put on notice legislation in the event of a work stoppage. Our government is extremely concerned about the disruption at Air Canada and the damage it would cause to Canada's fragile economy. That is why we have taken action and we are moving forward.

[Bob Rae, Liberal, Toronto Centre, ON]

Mr. Speaker, I appreciate the opportunity to say a few words and ask the member a question.

What I find contradictory in the government's position with respect to Air Canada is simply this. On the one hand, the government, including the Minister of Finance and everyone else, is saying how strong and robust the Canadian economy is, how well things are going, how Canada is leading the way, how we are ahead of the G7, ahead of the G8, ahead of the G20—

[Some hon. members]

Oh, oh!

[The Speaker, Conservative, Andrew Scheer]

Order, order. I am sure the hon. member for Toronto Centre would appreciate it if colleagues would hold off on their applause until he finishes putting the question. The hon. member for Toronto Centre.

[Bob Rae, Liberal, Toronto Centre, ON]

Mr. Speaker, obviously the party opposite knows nothing about irony, because on the one side it says what I just noted, and on the other side it says that this economy cannot possibly withstand a work stoppage at Air Canada, that there is no possible way to withstand it.

I ask the parliamentary secretary this simple question. If Air Canada is an essential service, which is essentially what the Government of Canada is now saying, why not declare it an essential service and give the workers the equivalent right to strike instead of this terrible improvisation and imposition it is making? The government is making a travesty of labour relations, it is making a travesty of collective bargaining and it has nothing with which to replace it.