Bill C-10 (Historical)

An Act to amend the Air Canada Public Participation Act and to provide for certain other measures

This enactment amends the Air Canada Public Participation Act to provide that Air Canada’s articles of continuance contain a requirement that it carry out aircraft maintenance activities in Ontario, Quebec and Manitoba and to provide for certain other measures related to that obligation.

Air Canada Public Participation Act

[Martin Shields, Conservative, Bow River, AB]

Madam Speaker, it reminds me of the Canadian passenger arriving at the Pearly Gates. There were clocks behind Saint Peter. One of the clocks was entitled “saints”, and Mother Theresa's hands had not moved on the clock. The passenger asked why: “She never lies.” The next clock was entitled “airline mechanic”, and the hands had hardly moved. He said, “They're very truthful. Let's be honest.” Then there was the title “federal politician”, and the clock was not there. The person wanted to know why. He said, “Well, years ago we took that clock and we used it as a ceiling fan.”

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, I am pleased to be joining the discussion today. I am also pleased to see you sitting in the chair and doing a great job on behalf of all women. It is a delight to see you constantly in that chair.

I am pleased to stand and speak in support of Bill C-10. It is legislation that, while somewhat technical in nature for a lot of people to follow, is incredibly important for Canada's national airline, for the aerospace sector, and for the related jobs and economic activity on which the Canadian economy so importantly relies.

However, before I get to my main points, I want to take a moment to offer my compliments to some of my colleagues who have already spoken on this important topic. We have heard a variety of issues raised. They are issues that the committee will have an opportunity to review and discuss and to look at very thoroughly.

There already has been very good debate on Bill C-10, as we heard on Friday, and of course from my colleagues today. I am eager to add my voice to that. However, inasmuch as debate in the House is important, as chair of the transport committee, I am eager to hear from the stakeholders once the legislation is referred to the committee.

Before we get to that, I would like to specifically compliment the parliamentary secretary, who touched off this debate by clarifying several important points. For example, the parliamentary secretary confirmed that the bill is being submitted for consideration by the House in the context of an historic investment by Air Canada in Canada's aerospace sector. That is very true. As members all know, Air Canada has announced its intention to purchase some 75 C Series aircraft from Bombardier. Adding to that investment, Air Canada has promised to ensure that these planes will be maintained in Canada for at least 20 years. That is a very significant investment, and a huge help for our economy. The importance of these decisions cannot be understated when it comes to jobs and growth of Canada's economy.

Allow me to be even more specific. The facilitation of the creation of centres of excellence will be a boon when it comes to jobs across the aerospace sector. The parliamentary secretary verified that Quebec has estimated that the creation of the centre of excellence in Montreal alone could produce 1,000 jobs in over 15 years, while the manufacturing of Air Canada's C Series aircraft could create an additional 300 jobs. There will also be more jobs in Ontario and Manitoba.

These are not just jobs. These are families who will enjoy a solid income, benefits, and stability for years to come. Those families will support communities, and those communities will fortify our great country. These are the kinds of investments and outcomes that Canada should be pursuing. They are market driven, promise to improve Air Canada's bottom line, and will allow for service improvements by prompting technological investment right here in Canada.

However, of course there have been genuine impediments to this approach in the past. For example, in 2012, Quebec's Attorney General took legal action against Air Canada, accusing the carrier of non-compliance with provisions of the Air Canada Public Participation Act.

Madam Speaker, I must stop for a moment. I forgot to mention that I am sharing my time today with the member for LaSalle—Émard—Verdun.

Quebec has now made the decision to end that litigation, in light of Air Canada's investments in the aerospace sector and the related promise involving maintenance commitments in Quebec. This opens an important window for Canada to modernize the Air Canada Public Participation Act, which is what this is all about.

This goodwill, fortuitous timing, and opportunity must not be squandered. We need action now. The purpose of Bill C-10 is to amend the sections of the act that have to do with Air Canada's operational and overhaul centres. With these changes, Air Canada will establish a centre of excellence in Quebec, Ontario, and in Manitoba. These centres will be able to not only service Air Canada's planes, but also to offer those services to other national and international airlines.

Creating this new revenue stream, coupled with increased flexibility for Air Canada management, would mean a more dynamic and modern business structure, and clearly that should be good for everyone—Canadians, Air Canada, and all of our other spin-off industries.

However, let us not forget that the current legislation is nearly 30 years old and this is no longer 1989. The current act was the product of a time when countries around the world were moving away from high regulation and public ownership in sectors such as air transport. Canada was not immune to global trends, and so we followed by deregulating the air-transport sector, commercializing our major airports, and transforming Air Canada from a crown corporation to a private company. This was the right move at that time, but the world has changed, and to be successful in 2016 we must again look to modernize.

However, none of this can happen if we refuse to provide Air Canada and our aerospace sector with the tools needed to prepare for the challenges of modern businesses and the investment environment.

Now, many members across the way have raised questions in the House—justifiable questions, questions that are seeking answers. They ask why we must do this change now, and why this change must occur so quickly.

The truth is that the aerospace and air-transportation sectors exist in very dynamic environments. Other air carriers, Canadian and international, are not subject to the same obligations regarding their maintenance facilities. That means they can seek out efficiencies in ways that are simply not available to Air Canada, a fact that places Air Canada at a competitive disadvantage. Bill C-10 would help to establish a new balance. If we want the economic benefits of high-paying, quality, reliable jobs promised by all of the other sectors, we must arm the players within that sector accordingly. This is why we are here today, and it is why Bill C-10 is so important for all of us in the House and for all Canadians.

In other words, this government has introduced this legislation at a critical time in the history of Canada's aerospace history. Not only is Bombardier offering a game-changing product for the entire global industry, but Canada's most important airline is planning to take advantage of the technological differences and efficiencies and the heightened environmental performance by generously and wisely investing domestically for its aircraft fleet renewal.

Investing in a cutting-edge product that was designed and manufactured mainly in Canada will improve Air Canada's ability to compete globally and to serve all Canadians. Everyone would win, but only if we act now. To be clear, the government wants Air Canada to have the flexibility needed to organize and manage its business operations here and around the world. We understand that the air-transport sector has evolved and will continue to evolve, and Air Canada needs the tools and the regulatory supports to keep pace. However, this must be done while maintaining adequate safeguards for Canadian workers and suppliers.

That is why we are proposing to ensure that the act continue to require Air Canada to carry out aircraft maintenance in certain Canadian regions. I believe that Bill C-10 would do all of these things, and I am eager to hear from stakeholders at the committee so that we can give a thorough hearing to the many people who will want to make their comments, so we can ensure we have a strong, positive piece of legislation going forward that will ensure the jobs are here in Canada but that, if work is done elsewhere, it is also done to Canadian standards.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I thank the member for her speech. She said a number of things that might seem curious insofar as the bill does not mention Bombardier at all.

I wonder if the member could just clarify. Was the decision to introduce this bill influenced by Air Canada's decision to purchase the C Series? Would the bill have been introduced had the decision to purchase the C Series not been made?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, the issues before us require action to ensure that Air Canada—that is the issue we are dealing with—has the flexibility to go forward.

Those of us who spend a lot of time at airports see the amount of growth that is happening at any of our major airports and the number of new airlines that are coming in. It is important that Air Canada, in whatever it has to do, has the flexibility to be able to move forward, to be able to compete, to be able to ensure our aircraft are number one, and to give an opportunity to showcase Canada every step of the way.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I think it is worth noting, in fairness to the hon. member who just asked a very good question, that there was not an answer to that.

It is odd to have the Liberals on the one hand wanting to invoke what is going on with Bombardier and the C Series order in their speeches. When they are asked a pretty obvious question, which is if we are talking about Bombardier and Air Canada in the same breath, it would be nice to hear the government just say so. I think it makes a lot of sense to be asking if there is a connection between the two. It seems obvious that there is.

In her remarks, the hon. member often talked about flexibility, about the need to compete. When we talk about the virtues of this deal in terms of jobs, centres of excellence, how wonderful it is that we will be building these centres of excellence, and how well suited the areas are in which Air Canada will build those centres of excellence or do the work it will be doing competitively, what is missed is that nothing in the act as it stands prevents those centres of excellence from being established. Therefore, why is it we have to give up legal guarantees for good jobs, different kinds of jobs, in order to get these other jobs, if these areas are so well suited to the kind of work that will be done?

I would mention, because we are giving up jobs with a legal guarantee, what legal protections are there for the jobs at the centres of excellence?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, every time, we can try to ensure that whatever legislation we pass is respectful of jobs, communities, and people who have those jobs, but opens doors and provides opportunities for new jobs in new areas.

Bombardier is a natural partner of Air Canada. We will have an opportunity to showcase new planes if it goes in that direction, but investing in our aerospace sector is effective. It is tremendous growth for Canada to be able to succeed, to be able to offer expansion, and to be able to offer jobs for many Canadians.

More important, a lot of young people are very keen to get more involved in the aerospace industry. I think our job as legislators is to make sure that companies competing in Canada have a level playing field, have the flexibility they require to do well, and not be held back by legislation and things that occurred in 1989 or 1997.

We need to be realistic. It is 2016. If we want our national carriers and our companies to be able to compete on a broader scale, we have to make sure that we take the handcuffs off and that we provide the opportunities for them.

[Kate Young, Liberal, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, I want my hon. colleague to explain why it is so important at this point to move it on to the committee stage.

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, many of the colleagues who have participated in this debate Friday and today have outlined concerns that they have. We will not get any answers for those concerns here in the House, but we have an opportunity to hear from various people, stakeholders and so on, at committee and to make other recommendations as necessary.

[David Lametti, Liberal, Parliamentary Secretary to the Minister of International Trade]

Madam Speaker, on March 24, 2016, our government introduced Bill C-10, an act to amend the Air Canada Public Participation Act and to provide for certain other measures in the House of Commons. The purpose of the bill, more specifically, is to amend the sections of the act that have to do with Air Canada's operational and overhaul centres. It is important to point out that this bill is being introduced at a time that is quite historic for the Canadian aerospace industry.

In February 2016, Air Canada announced that it planned to purchase up to 75 C Series aircraft from Bombardier, and that it would carry out the maintenance of those planes in Canada for at least 20 years, beginning with the first delivery. Air Canada will also help establish a centre of excellence in Quebec for the C Series aircraft, as well as another centre in western Canada, to be located in Manitoba.

These centres will be able to not only service Air Canada's planes but also to offer those services to other national and international airlines. In other words, we have introduced a bill at a time that is pivotal for Canada's aerospace industry. Not only is Bombardier offering a product that is a game changer for the aerospace industry worldwide, due to its efficiency and environmental performance, but our most important Canadian airline, Air Canada, clearly intends to make massive investments in the renewal of its fleet of aircraft.

Investing in a cutting-edge product that was designed and manufactured mainly in Canada will improve Air Canada's ability to compete globally and to serve Canadians. In this historical context, we propose to modernize the Air Canada Public Participation Act, which we find to be outdated in part.

More specifically, the bill amends paragraph 6(1)(d) in the provisions requiring Air Canada to maintain operational and overhaul centres in the City of Winnipeg, the Montreal Urban Community, and the City of Mississauga.

The law clearly intended for Air Canada to continue maintaining its aircraft in certain regions of Canada. At the same time, the law was designed with one key public policy objective in mind, which was to privatize a crown corporation and allow it to become a competitive and viable private company. The airline industry has changed quite a bit since the law came into force in 1989.

In 2015, Air Canada carried more than 41 million passengers and provided regular, direct service to 63 Canadian airports, 56 American airports, and 86 other airports worldwide, in Asia, Oceania, Europe, Africa, and South America.

Air Canada cannot escape the highly competitive international market. For example, the other national and international airlines are not subject to the same requirements regarding their maintenance facilities. We must also consider Air Canada in the context of the global marketplace, a market that is dominated by large, multinational companies that operate over vast networks and with extremely expensive equipment.

Given the market's cyclical nature, it is also very sensitive to fluctuations. All it takes is an unfortunate incident, such as a pandemic, an accident, or a terrorist act, for the market to flounder and for an airline's revenue and profit to be significantly affected.

Air transportation provides vital connectivity both within our vast country and with the outside world. It is also a significant source of jobs. For example, Air Canada alone employs nearly 25,000 people.

In light of this economic context, we believe that the Air Canada Public Participation Act may be imposing limits on the company's ability to be competitive and profitable.

We therefore believe that the current law inconsistent with an approach to air transportation based on competitive and market forces as the best way to provide passengers with reasonably priced services. Like any company, Air Canada needs more flexibility in order to operate in a competitive environment and remain viable in the long term. Accordingly, the federal policy on Canada's air transportation industry focuses on competitive and market forces.

We also apply the user-pay principle for infrastructure and services, which is not the case in all of the countries that compete with us. As such, we cannot rest on our laurels because the aviation world is changing rapidly. Naturally, we were all concerned by the closure of Aveos Fleet Performance, which resulted in layoffs across the country.

Although portions of Aveos were purchased during bankruptcy proceedings and continued to operate, some employees did not end up finding work in their field. Of course we were concerned by this closure and by the fact that Air Canada stopped having certain kinds of maintenance done in Canada.

Air Canada's recent announcement about the C Series and its collaboration in developing centres of excellence gave us hope that highly skilled workers would find work in this high-tech sector. Air Canada's plan to purchase C Series aircraft would bring together two sectors that are vital to Canada's economic development: air transport and the aerospace industry. It would enable Air Canada to operate cutting-edge planes, thereby reducing its costs, its fuel consumption, and its greenhouse gas emissions, while minimizing noise.

As we know, the planes will be designed, built, and maintained in Canada. The creation of centres of excellence for the maintenance of C Series planes in Quebec and Manitoba will certainly have a positive impact on the industry and will probably attract other air carriers to use the services available. The Government of Quebec estimated that the centres of excellence could create 1,000 jobs over 15 years. In addition, manufacturing the C Series planes would enable Air Canada to create another 300 jobs. Moreover, the creation of a centre of excellence for western Canada would create an additional 150 jobs in Manitoba.

In closing, changing the language used to describe the activities and where they may be performed will allow us to modernize the legislation and make it more relevant.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Madam Speaker, could my colleague opposite tell the House what government intervention should be used, if any, to sustain Bombardier should it come to the government requesting funds?

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Madam Speaker, that dossier is before the government.

We are trying to promote in this country the technological advances that come with the aerospace industry. We are trying to protect jobs, and we are trying to do so in a responsible fashion.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I detect a contradiction between the Liberal members' two arguments.

On the one hand, they say these changes will create more jobs for Canadians because we will have centres of excellence in Winnipeg and Montreal, but they are forgetting that there are no guarantees these jobs will exist from one year to the next.

On the other hand, they say that the industry has changed a lot since 1989 and that Air Canada needs to be flexible and competitive. They are talking about opportunities available to other companies and having work done in other countries. That is the competitive advantage we are talking about here. We do not need to change the law to have the centre of excellence jobs. For Air Canada to enjoy the benefits of flexibility, jobs have to be exported out of Canada.

Will the government at least admit that this bill will result in quite a few jobs leaving Canada?

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Madam Speaker, I thank my hon. colleague for his question.

I am going to answer the second part first. Now is an appropriate time to amend the law because the situation has changed in the past 30 years, and this law was designed to privatize a crown corporation. Now, we are trying to help Air Canada be more competitive on the market. The present situation is very important to this bill.

As for the member's first question, we are investing in an industry. There are risks because there is a market. We cannot guarantee jobs, but we sincerely believe that the changes will create jobs.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, given that Air Canada provided a comprehensive submission to the Canada Transportation Act review and this measure was not a part of that, and given also that the minister has had this report in his hands since last December, I am wondering if the parliamentary secretary could explain why the minister would undertake to amend this legislation and not take the opportunity to address all of the measures that Air Canada did put into its submission.

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Madam Speaker, we are proposing modifications that we feel would give Air Canada the tools it needs to compete in an international market. We did not accept every suggestion. We picked the ones we thought were the best.