Transport Committee on May 31st, 2012

[Olivia Chow, NDP, Trinity—Spadina, ON]

Thank you.

The performance-based model is really quite interesting. I see this Windsor-Toronto-Montreal airspace service project and the required navigation performance that is in your presentation here.

I have been getting an escalating number of noise complaints, whether from residents in and around the area of the Dorval Airport, or from in and around Toronto Pearson International Airport. Is it because the flight paths have changed? Because the flight paths changed, it has helped the airlines save fuel because of the new system. Is it causing the airplanes to be closer to residential neighbourhoods and therefore generating more noise complaints, and then costing the local residents who then try to soundproof their houses? Is that what's happening? It seems that the flight paths have changed. Now, it could be that the local residents don't understand the flight paths, but it seems that they're saying the planes are coming closer and that it's noisier. Is it because of this system?

[John Crichton]

I think each particular complaint would have to be looked at specifically. I can tell you generally that the implementation of these changes was done over, first, a consultation period that lasted a better part of a year. However, of all of the changes in the flight paths that were adopted, none of them resulted in aircraft flying at lower altitudes. In fact, most of them are at higher altitudes and therefore less intrusive from a noise point of view. I think what you may be hearing about is that with the change in some of the patterns, people now see airplanes in places they didn't used to see them. There's a difference between seeing airplanes and hearing airplanes.

We'd be happy to look into the specifics of any particular complaint but we've had surprisingly few complaints since the implementation of this system, which was back in February. Both Dorval Airport and Pearson have had the same experience. We need to look at the specifics.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Can you outline the whole project in terms of timing, implementation, and consultation. I didn't know about the consultation because I thought I would have heard about it. That's phase one. It's now implemented. There was a consultation period. What's the process? What is phase two? What's the timing? How will that be put in place?

For Transport Canada, once you've done that, I assume they would then have regulations to support phase two. Is that how it works?

[John Crichton]

The system was developed as a proposal. We worked in this case in conjunction with the airports in Toronto, Ottawa, and Montreal. The material was published. We set up special websites. We held public meetings with the noise management committees in all three cities. A whole host of activities went on, I think for the better part of a year. I'm looking at my colleague—yes, it's something like that. It was pretty transparent and open.

We spoke to all the groups who historically had expressed interest or concerns about aircraft noise. Of course, the airports in all three cities are very sensitive about this, and they all have noise management committees with members of the public involved. It was pretty extensive consultation, and again we can provide that to you. But I can tell you, as someone who's been in this business all my life, there's less noise as a result of the changes we made than before.

[Olivia Chow, NDP, Trinity—Spadina, ON]

What is phase two? Is there a phase two? I see phase one, with project being implemented in early 2012.

[John Crichton]

I'm not sure what phase 2 is. I'll have to check on that.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Okay.

In terms of the tonnage, when this project is done, I assume there will be an evaluation. Once the evaluation is done, is there a plan to implement it across Canada?

[John Crichton]

That really relates to the PBN initiatives that I was talking about in my testimony.

The Toronto, Ottawa, Montreal corridor was chosen initially because of the density of traffic in that corridor that produced a lot of positive results. However, performance-based navigation, satellite-based approaches, are much more efficient than the traditional methods. They allow aircraft from the top of their descent at 35,000 feet to throttle back, and the pilots never touch the throttles again until they hit the runway.

The amount of fuel savings is quite incredible given these modern technologies allowing that. So we are designing the airspace and the procedures to allow this to happen. Eventually—maybe in a long time, once we have everyone equipped and the technology deployed appropriately—we hope to be able to do this everywhere.

[The Chair, Conservative, Merv Tweed]

Thank you.

Monsieur Coderre.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you, Mr. Chair.

Thank you for your presentation.

Could you explain something to me? If we focus more on the performance than on the method, will we need to take certain collateral approaches into consideration as well? You spoke about noise. As an aside, I can make a distinction between seeing and hearing an airplane. For example, you might decide to go a certain way, so you can lower the ceiling so that it is more efficient and, in doing so, you will produce less greenhouse gas.

How do you see that regulation being implemented? I imagine that factors other than just performance need to be taken into consideration. How do you see this, from a feasibility point of view or…

the doability of those regulations?

[John Crichton]

I guess there are two distinct issues. The issue of whether you have a prescriptive regulatory approach, or a performance-based one, has been around in aviation for quite awhile. We're really talking about matters of airworthiness, and operation, and so on. Noise regulations are a much more subjective issue. Transport Canada does ultimately regulate noise at airports, and that's why we have noise-abatement procedures and a whole host of curfews in some places, and so on. I think the two are quite exclusive; I don't think one needs to affect the other at all. The performance-based navigation approach and a more modern way of handling aircraft, in fact, is much more noise-friendly, if you will, to people on the ground than the old way of doing it.

[Denis Coderre, Liberal, Bourassa, QC]

I'm trying to understand what we can do to ensure that the regulation is made by Transport Canada.

You told us that the installation of an automated weather observation system is expensive. How much does it cost? What would the cost be to the government? How do you see the division of the costs? I imagine that the government's contribution is limited.

If we are focused on performance, do you think it would involve an investment over a number of years? Strictly from a budgetary standpoint, what are you asking of the government?

[John Crichton]

The only thing we're asking from government in terms of AWOS is capital assistance to initially put it in in the north, and by that I mean the three northern territories and northern Quebec. The reason for that is simply the very high site construction costs in these areas. I think, just to give you a rough order of magnitude, all 50 sites that we would have in mind in those areas—and these are all airports in small communities—could be done over a four- or five-year period with government assistance in the area of $40 million to $45 million. So it's not a huge sum of money. Nav Canada would pay for the equipment and subsequently maintain and run it. It's just that we can't find a way to justify in a small community, where there are two or three flights a day—albeit some are medevac flights required to save people's lives and so on—making those kinds of investments. And we don't even get revenue from a lot of these flights. But as someone who worked in the north for a very long time, I think this would be a really huge and smart infrastructure investment that we would urge the government to make.

[Denis Coderre, Liberal, Bourassa, QC]

The reality is different in the context of an Arctic policy. It's not just a matter of being able to have a certain performance and that it be accessible. You spoke about safety. With the issue of the Northwest Passage, the whole satellite approach will also have an impact, for example, to protect our sovereignty or protect us from drug trafficking. I imagine, in this context, when you propose the plan, other departments could be approached, not just Transport Canada. A policy could be created that affects several departments. It could also affect National Defence, I imagine.

[John Crichton]

There's no question that what we're doing both in terms of AWOS and satellite navigation—and there are other things I haven't talked about in this regard—are all things that I think enhance Canadian sovereignty. We work closely with the military and the coast guard and so on, so it's all definitely a benefit to all involved.

[Denis Coderre, Liberal, Bourassa, QC]

I have one last question about regulations. NAV CANADA is working with organizations from other countries. What is the status of regulations in other countries? When it comes to standardization, could it lead to greater effectiveness? Are our standards lower than European standards? In any event, your corporation is governed by ICAO. With respect to what you said about the installation, what are other countries doing?

[John Crichton]

Each country sets its own safety standards. Most countries belong to ICAO, and ICAO has recommended standards and practices. Canada is obviously a leading member of ICAO and like most developed countries adopts most of those standards and practices. Each country sometimes has reservations about individual ones, but I think Canada is seen from an aviation point of view as probably the safest country on earth, if not in the top two or three.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank our guest for attending this morning. Most of my experience as it relates to flight is of travelling from London, Ontario to Ottawa. I recall that just a few years ago we had Nav Canada involved. We had what was originally the London International Air Show, which then became the Great Lakes International Air Show. They made me president because I'd never been to an air show before and they thought that would be fun. It certainly gave me some insight into some of the very compelling dynamics that you have to deal with in terms of planes in the air and all the other issues that you deal with.

But I'm particularly curious, and I found this interesting. Mr. Crichton, when I heard your testimony today. First you talked about benefits resulting from privatization, and I want to compliment NavCan for having that approach. You've indicated that you feel that by virtue of being privatized you stayed ahead of the innovation curve. I've noted in your testimony some of the significant dollars in fuel cost savings that customers have been involved with because of changes in technology.

But what would you say the biggest advantage of privatization has been for Nav Canada?

[John Crichton]

Being in charge of our own destiny and having to, if I can use the vernacular, “produce or else” has unleashed the innovation and the ability of the people to rise to great heights. Nav Canada is now seen, without question, as the world's leading air navigation service provider, and that has come about because of our privatization, because of the structure that we're in and our ability to do things fairly quickly.

We're self-financing; we're not dependent on somebody else's budget. If you're part of government, you're caught in the federal government's budgetary policies and processes and so on. We're free from that. We're an independent private company and we finance ourselves in the public debt markets. We have to perform. If we don't, they'll replace me and get somebody who can perform.

[Ed Holder, Conservative, London West, ON]

So without putting words in your mouth, did I hear from you that as the result of privatization, Nav Canada is streamlined, more effective, more technologically advanced and free from the fetters of government interference? Would those be your comments?

[John Crichton]

That's not just my opinion. Anybody who knows this business around the world will tell you the same thing. And there are many people who have noticed it; other countries are now looking and asking whether they should go there.

[Ed Holder, Conservative, London West, ON]

Chalk one up for privatization.

I have a question for you, just so that I can understand a bit more. You talked about Nav Canada's technology and how you sell some of that technology to countries around the world.

How, ultimately, do you make your money? Is that what you do, sell your technology? Could you explain that a bit more for the committee?

[John Crichton]

The only difference between us and an ordinary business corporation is that we don't have any shareholders. You need to look at us as being more or less like a customer cooperative, if you will. To the extent that we make money, we do one of three things with it: we either pay down debt, use it to finance capital spending, or reduce our charges to our customers. So the dividend, if you will, would go back to the customers in that way.

That, I think, is an appropriate way of handling what we are as an air traffic control operation: a monopoly, and I would argue one of the few natural monopolies that you would find.

How do you bridge that gap? I think that's what's unique about Nav Canada. We've done it by saying we're going to set it up this way, as a non-share capital corporation. But the people who ultimately have to pay all the bills, who are the customers, get the benefit if the business runs properly.

[Ed Holder, Conservative, London West, ON]

It's private, but would your books be on the public record?