Transport Committee on March 29th, 2012

[Pierre Legault]

Possibly they could do so.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Is there anything in the Air Canada Public Participation Act that would require Aveos to come out of bankruptcy protection? Is there any section in the Air Canada Public Participation Act that would compel taxpayers to provide a bailout to Aveos to bring it out of bankruptcy protection?

[Pierre Legault]

No.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Could the Government of Canada ban Aveos from filing bankruptcy protection under the Companies' Creditors Arrangement Act?

[Pierre Legault]

The Government of Canada has no relationship with Aveos itself, so I would not speculate on that.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

So the Government of Canada does not have the legal authority to compel a company to end its bankruptcy filing?

[Pierre Legault]

It's in the hands of Aveos.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Can you list the sections in the Air Canada Public Participation Act that require Aveos to continue operating?

[Pierre Legault]

Aveos is not mentioned in the act.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Is there anything in the act that would render Aveos's filing for bankruptcy protection illegal?

[Pierre Legault]

The act is focused on Air Canada itself. The obligations are on Air Canada, not on any other entity.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

And what sections in the act compel Air Canada to receive its maintenance and overhaul services from Aveos?

[Pierre Legault]

All the act provides is that Air Canada has to include in its articles an obligation to continue maintenance in the three cities.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Through Aveos?

[Pierre Legault]

No, sorry, to Air Canada.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Through Air Canada.

In the event that those services are contracted out, which sections of the law ensure that they are contracted out to Aveos?

[Pierre Legault]

There's nothing in the act on that specifically.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

All right. So there's nothing in the act requiring Aveos to continue operating or for Air Canada to keep Aveos operating?

[Pierre Legault]

Yes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

We learned earlier this morning that Aveos has burned through $1 billion in five years. It was offered an additional bailout of $15 million by Air Canada and believed that would not be enough money to keep it operating. Presumably, based on that trajectory, to keep Aveos operating for another five years, it would require another $1 billion. Given that there are no private investors or lenders coming forward to provide that $1 billion, taxpayers would be the only ones who come to mind to do so.

Is there a fund at Transport Canada that could provide the $1 billion that would be necessary to keep Aveos functioning over the next five years?

[Kristine Burr]

No, there is no resource whatsoever available.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Are you recommending the creation of a fund that would provide for $1 billion to keep Aveos functioning in the next five years?

[Kristine Burr]

No, we are not.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

You're not.

If such a fund were created to provide for such a bailout, would Transport Canada have to seek additional spending authorizations from Parliament? Or is there an extra $1 billion within Transport Canada's existing allocation to provide such a bailout?

[Kristine Burr]

There are no resources available within Transport Canada's current votes to provide any form of assistance to the air sector such as you described.