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.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Thank you very much.

I appreciate both of you being here.

We have heard over and over again that the Government of Manitoba has come to an agreement. From what I'm hearing right now, there is no agreement in place, and you oppose Bill C-10. I'm glad you clarified that.

Just previously, we had the Aerospace Industries Association of Canada and Premier Aviation here. Both were very supportive of Bill C-10 in terms of the C Series maintenance opportunities in the centre of excellence in Winnipeg.

Can you comment on that?

[Heather Stefanson, Deputy Premier, Government of Manitoba]

Thank you very much, Madam Chairperson.

I'm pleased to be here today to speak on Bill C-10, the amendments to the Air Canada Public Participation Act.

Manitoba is home to a world-class aerospace industry. It is the largest in western Canada, with approximately 5,400 individuals employed directly, and many more indirectly in related sectors of our economy. Our firms are diverse and on the cutting edge of technology and innovation. The outlook for the Manitoba aerospace sector is positive.

Nonetheless, the global supply chain is extremely competitive, and Manitoba companies face severe competition from lower-cost jurisdictions. The loss of high-quality skilled jobs that resulted from the closure of Aveos in 2012 is still very much felt in our province. It is healthy for our country to maintain a robust and competitive aerospace industry outside of eastern Canada. As a new government, we need to be sure that Manitoba will be given the consideration it is due if changes to the Air Canada Public Participation Act are being sought.

There are significant implications to moving forward with Bill C-10. It is not appropriate to rush through without substantial dialogue and consideration. Actions taken by federal governments can have an enormous impact on the sustainability of Manitoba's aerospace sector. One of the most notorious was the CF-18 contracts. These types of conflicts serve no one's interests, and can be avoided through proactive participation.

Our government has been engaged with our partners in the federal government and Air Canada, as well as local stakeholders, regarding the implications of Bill C-10.

In February 2016 the previous government wrote Minister Garneau to request that amendments to the Air Canada Public Participation Act be limited to expanding the geographical scope of Air Canada's commitments within Manitoba. The proposed amendments go significantly further than the geographical scope. The spirit and original intent of the legislation was to ensure that skilled heavy maintenance work remained in Manitoba. While some flexibility can be appropriate, the proposed amendments virtually eliminate any obligation for the company to maintain high-quality skilled heavy maintenance jobs in our province. This is contrary to the interests of Manitobans.

The aviation industry has evolved substantially since the privatization of Air Canada and the introduction of the Air Canada Public Participation Act. Competitiveness is an integral part of economic growth. We embrace change, but it is the responsibility of our new government to ensure that Manitoba's aerospace industry emerges strengthened, not weakened, as a global competitor.

Manitoba's interests are clear: economic growth, high-quality jobs, and a strong and competitive aerospace industry. The federal government's approach to Bill C-10, simply put, jumps the gun. Bill C-10 is being rushed through the process before the necessary specific investments and binding commitments by the federal government and Air Canada have been secured.

As a direct result, the Government of Manitoba must oppose Bill C-10. Our province will continue to do so until such time as specific commitments have been made to reassure Manitobans that changes to the Air Canada Public Participation Act and related accompanying investments in job creation will provide a net benefit to the Manitoba economy.

This concludes my statement to the committee. I thank members for listening today.

[Sean Fraser, Liberal, Central Nova, NS]

To the Quebec Employers Council, one of the points you raise that I hadn't heard much about before was the potential boost to the tourism industry in Canada.

Could you elaborate a little on how Bill C-10 may give a boost to the tourism sector?

[Sean Fraser, Liberal, Central Nova, NS]

Excellent.

A group like Premier, a Canadian company with operations in some place like Trois-Rivières, would not, without a bill like Bill C-10 passing, be able to bid on certain supply contracts for maintenance work. Is that correct?

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

Thank you very much.

I want to ask Mr. Quick, in your opinion as a leader in the industry, is it the case...? We heard a little bit about what the C Series jet could mean for the Canadian aerospace industry. Is it your understanding that there is a connection between Air Canada's purchase of the C Series and the passage of Bill C-10 ?

[Ronnie Di Bartolo]

I agree. It's going to prohibit us from creating new jobs with the centres of excellence. Also, we would be putting at risk the jobs that we presently have in place with all of our facilities. Therefore, I believe that Bill C-10 is very important to Premier Aviation and to all of our facilities throughout the country.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you, Madam Chair.

Welcome back, gentlemen.

I have just a simple question. If you could, please be brief, because as the Chair mentioned, I am sharing my time.

If Bill C-10 does not pass, what implications will this have on you?

We could start with Mr. Quick.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Madam Chair.

I thank all of the witnesses for their participation today.

I understand from what you have said that the representatives of the three groups of witnesses support Bill C-10 as presented.

Madam Chair, for the information of all the parliamentarians who are here and who need all of the necessary information in order to vote on Bill C-10 in the House, as well for the stakeholders who have just shared their position on the bill, I want to mention that my colleague Ms. Kelly Block has tabled a notice of motion which reads as follows:

That the committee request any documents, research projects, notes, emails and correspondence that contributed to or discussed the deck “Amendments to the Air Canada Public Participation Act” and that these documents be submitted to the committee by Wednesday, May 11, 2016.

This motion was tabled by Ms. Block within the required timeframe. It is important that our guests have access to this information. From the beginning, all sorts of things have been happening in committee. One day we are told that there were meetings with Air Canada; another day, we are told that there were no meetings with Air Canada. Sometimes we hear that Air Canada met with people; and then we hear that Air Canada did not meet people. In short, it would be important, to support the work of the committee, that members of the committee adopt this motion, and that we be given access to all of the information we need.

There is a reason for this. In fact, the bill itself mentions that, even if Quebec has stated that the term “overhaul” referred to heavy maintenance, the courts recognized that no such maintenance had ever been done in Mississauga. We have also heard that Air Canada concluded an agreement with the Government of Manitoba to create a centre of excellence in western Canada for the maintenance of aircraft in that province. However, we have learned that the agreements have not been concluded yet. The Government of Quebec said the same thing in the brief it sent to members of the committee.

I want to quote two excerpts from that brief. This is the first:

Pending the conclusion of final agreements, the Government of Quebec has agreed to drop its lawsuit in relation to Air Canada's obligations to have an overhaul and maintenance centre.

I repeat that that is “pending the conclusion of final agreements”. And yet today we heard the witnesses tell us that the agreement had been concluded with the Government of Quebec. However that does not seem to be the case; the Government of Quebec itself has said so.

This is another excerpt from the brief:

Additionally, in order to provide for all aspects of the agreements reached, the Government of Quebec is asking that, once Bill C-10 receives royal assent, the legislation come into force after the final agreements described above have been concluded.

Once again, I understand that the agreement with the Government of Quebec has not been concluded.

Later we will be hearing from a representative of the Government of Manitoba who will probably also tell us that the agreement has not yet been signed.

That is why, Madam Chair, it is important that the members of the committee be made aware of this notice of motion, which is quite simple. The purpose of the motion is simply to allow us to have access to all the necessary information. This will help parliamentarians and witnesses taking part in this committee's study of Bill C-10.

Madam Chair, with the authorization of my colleagues, I would like us to adopt this motion immediately so that we may conduct our study with all of the necessary information in hand. This will also help witnesses to form an opinion about the bill.

[Yves-Thomas Dorval, President and Chief Executive Officer, Quebec Employers Council]

Good afternoon.

I will deliver my remarks in French, if you don't mind.

First of all, we would like to thank the committee for allowing us to speak to you today about the importance of modernizing the Act to amend the Air Canada Public Participation Act through Bill C-10.

My name is Yves-Thomas Dorval and I am the chief executive officer of the Quebec Employers' Council or QEC. I am accompanied by Mr. Benjamin Laplatte, principal director, Public Affairs and Corporate Development.

For close to 50 years, the QEC has represented the majority of industry associations, and Quebec's largest employers. Directly or indirectly, it represents the interests of more than 70,000 employers of all sizes, in both the private and parapublic sectors, some of which are Canada-wide, if not international, enterprises.

The mission of our organization is to see to it that in a context of increasing global competition, businesses benefit from the best possible conditions to prosper in a sustainable way, that is to say a stable, predictable and competitive environment.

In keeping with the priorities dictated by the economic situation, the actions of the council are guided by five broad strategic axes set out in its action plan; three of these are more closely related to Bill C-10: competitive labour costs, intelligent regulation, and a sustainable, competition-based economy.

In light of these, the QEC was pleased to see the introduction of Bill C-10, which gives Air Canada the necessary flexibility to optimize its activities and continue to develop.

However, let us take a step back and look at the situation more globally, as others have done before me.

We think it is important to appreciate the value of the bill in the context of the need to strengthen the aviation industry in Canada, which has to be competitive.

The Canadian aviation industry is one of the cornerstones of our national economy. It is comprised of more than 700 companies spread out across the country, supports close to 180,000 direct and indirect jobs, and contributes $29 billion annually to our GDP.

Every year, it invests about $1.8 billion in R and D, which is on average five times more than the manufacturing sector invests.

Finally, the Canadian aviation industry plays a large part in our export market, as close to 80% of overall production is sold on foreign markets. That is enormous.

As it is among the largest world-class international players, Air Canada makes an important contribution to the Canadian economy, and is among the largest employers.

Exporting Canadian ingenuity and inventiveness to the world allows us to develop our competitiveness and continue to grow, and will help us to come out of this period of economic uncertainty. Knowledge- and innovation-based industries make us competitive and contribute to Canada's economy.

However, the players of the aviation industry are not dealing with a level playing field on world markets, as they face competition both from giant multinationals and governments. Since 1980, the contracting out of certain maintenance activities to specialized firms has become standard in this sector throughout the world. Allow me to remind you in this regard that the number of Air Canada's maintenance workers has more than doubled over the past 10 years. Today the carrier hires approximately 2,400 maintenance workers in Canada alone, in addition to the 1,000 workers employed by its regional partners.

However, no airline company in Canada or the world was subjected to maintenance restrictions like the ones that were imposed on Air Canada by the Air Canada Public Participation Act, even though these enterprises compete on the same markets for the same consumers. These airlines make their decisions based on the how their services compete in quality and price, and their lead times.

It is true that the Aveos company unfortunately had to close, and many jobs disappeared, but it is important to point out that as for any private firm, the success of that type of business depends first and foremost on its ability to compete effectively with its competitors through the quality of its services and prices.

It must be acknowledged that over the years Aveos was unable to keep up in this regard. Following its closure, other Quebec suppliers emerged. Through their expertise and competitiveness, they created hundreds of jobs in Quebec. They compete internationally to win airline carriers' heavy maintenance contracts, as was said a few moments ago.

The modernization of the Air Canada Public Participation Act will amend a law that was passed more than a quarter century ago, taking into account the fact that the air transport industry has changed greatly since then.

Bill C-10 will allow the carrier to make decisions based on its business acumen and its commercial discretion, just as private sector enterprises must be able to do. The bill affords it greater flexibility, which Air Canada needs if it is to compete effectively on the world stage. The bill recognizes that the carrier is an enterprise that belongs entirely to private sector interests, and does business in a highly competitive global industry. Indeed, the experts, some of whom appeared before your committee, refer to a very low profit margin of 2% to 4% for this industry.

By creating more equitable conditions, Bill C-10 will allow Air Canada to determine how much and what type of aircraft maintenance to do in Canada and elsewhere in the world. It seems clear that Bill C-10 will allow Air Canada to remain competitive and contribute to job creation in the fields of aviation, tourism and aeronautics in Canada for many years to come.

This bill is in fact in keeping with agreements concluded at the provincial level, in Quebec especially, where Air Canada has committed to contributing to the creation of a centre of excellence and maintenance for its C Series aircraft. The federal government acknowledges the settlement of suits involving provincial governments by amending the act in order to avoid similar litigation in the future.

In conclusion, the time has come to ask ourselves a simple question: do we believe the aviation industry should be a competitive part of our future? Our answer is a resounding yes. That is why we support Bill C-10.

Thank you.

[Ronnie Di Bartolo, President and Chief Executive Officer, Premier Aviation Overhaul Center]

Good afternoon, ladies and gentlemen.

Thank you for inviting us to this committee to speak about Premier Aviation and Bill C-10.

My name is Ron Di Bartolo and I am the president and CEO of Premier Aviation. I'm joined by my colleague Jean-Pierre Bastien, vice-president of operations of Premier Aviation in Quebec City.

To start, I would like to provide you with some background on Premier Aviation. We are a wholly owned Canadian business that provides primary airframe maintenance to the aviation industry. In addition to doing airframe maintenance, we also have facilities and capabilities to do paint work and other maintenance on aircraft.

We currently have four facilities, located in Trois-Rivières, Quebec; Quebec City; Windsor, Ontario; and Rome, New York. Our Canadian facilities employ 550 people, while our facility in the U.S. employs 170 individuals.

Our company facilities provide service to a number of airlines and different aircraft types. In Trois Rivières we service Air Canada and its fleet of Embraers and its partner Sky Regional and its fleet of Embraers also. We also provide paintwork for WestJet.

In Windsor we service WestJet's fleet and currently service First Air, Canadian North, and Sunwing. This facility handles Boeing 737s, ATR 42s, Embraer 190s, and other aircraft types.

In Quebec City we service American, Caribbean, and European operators, including Piedmont Airlines, Peninsula Airways, Corvus, LATAM, Air Guyane, LIAT, and several lessors of aircraft.

In Rome, New York, we service a variety of aircraft for Republic Airlines, Atlas Air Cargo, and GECAS.

Our ability to service so many aircraft types for different clients has come from years of investment in our workforce. Clients seek Premier Aviation because of our hard-earned reputation for excellent quality of work, quick turnaround times, and flexibility to schedule maintenance, all while being cost competitive. This is what it takes to be competitive in this industry. Our ability to also do paintwork and other maintenance provides us a significant advantage over our competitors and makes us value-added to our clients.

With respect to our work with Air Canada, we were first contracted to do paint and maintenance in 2009. Following the closure of Aveos in 2012, the scope of our work for the airline expanded to include heavy maintenance of some of its Embraer aircraft. Due to the positive results of this maintenance, Air Canada soon contracted Premier to do all maintenance on its Embraer fleet. Previously this work had been done by Aveos and Embraer facilities in Nashville, Tennessee.

Today, because of the advantage we can provide to Air Canada, all of its work is done in Trois-Rivières and supports the 354 employees presently there. In addition, this growing work has required us to expand our facilities throughout Québec at different times. As a competitive MRO facility in Canada catering to not only Canadian but international companies, we know we have what it takes to compete in this industry. We are competitive. Bill C-10 and its amendments to the Air Canada Public Participation Act would not restrict the location of the work we do for Air Canada and would provide flexibility for us to keep growing our business with the airline.

Over time we have shown that we can compete for Canadian business as well as for international business, and it is our hope that we will continue to grow and create maintenance jobs in Canada. With our highly skilled workforce and our expertise, flexibility, and low cost structure, we are well positioned to do so.

Thank you.

[Jim Quick, President and Chief Executive Officer, Aerospace Industries Association of Canada]

Good afternoon, Madam Chair and honourable members.

Thank you for the invitation to join you today to discuss Bill C-10 and the Air Canada Public Participation Act. We are pleased to be here to provide you with our perspective on how this legislation will support the growth and the competitiveness of the Canadian aerospace industry.

The AIAC represents Canada's aerospace industry, including major manufacturers and their suppliers. Our members are a diverse group of companies that are world leaders when it comes to the design, manufacture, and delivery of aerospace, space, and defence products, as well as the maintenance, repair, and overhaul, or MRO, of existing aircraft.

Aerospace is a global industry, so for us and for our members it is important to make business, policy, and investment decisions in a global context. Aerospace supply chains are not limited to a single country or even to a single continent. Our members are competing for contracts against other companies from around the world.

Canada's aerospace industry is the fifth largest in the world. For decades, we have punched well above our weight in the global marketplace. This is because we have built globe-leading capacity and capability when it comes to high-value, innovative aerospace products and services. We are home to a world-leading OEM in Bombardier and we have fostered a highly innovative supplier base that is integrated into growing markets all over the globe.

The legislation in question comes in the context of the announcement of two centres of excellence that will drive aerospace innovation and capacity in Montreal and Winnipeg, two of Canada's major aerospace clusters. These centres of excellence will help us maintain our competitive advantage in the global marketplace. They will help us ensure that Canadian aerospace firms continue to expand their capacity and capability to offer innovative solutions, not only to Air Canada but also to other major airlines and operators around the world.

In Montreal, a centre of excellence focused on maintaining the C Series will establish an important competitive advantage for companies seeking to conduct maintenance, repair, and overhaul activities on this new platform.

Bombardier, as I mentioned, is a world-class manufacturer, and they have created a world-class aircraft. As the C Series enters into service, this is also a prime opportunity for Canadian companies to secure a competitive advantage when it comes to contracts for any MRO activity related to the aircraft, not only for Air Canada but also for other major global airlines.

Manitoba is already home to a highly innovative aerospace sector. Winnipeg boasts Canada's largest aerospace composite manufacturing centre, an industry-leading cold weather engine-testing facility, and the world's largest independent gas turbine engine MRO company. The presence of a centre of excellence focused on MRO activity presents a new opportunity to develop additional capacity and capability for the Manitoba aerospace companies that can be exported into the international marketplace.

Bill C-10 is also important because it creates a level playing field for Canadian companies. As I mentioned at the beginning of my remarks, being competitive in a global industry requires an environment in which companies have the ability to make business, policy, and investment decisions in a global context. If our companies are going to survive, they need to be able to compete against the rest of the world, and we know they can.

For AIAC and our members, Bill C-10 is not only about providing services within Canada or to one Canadian company; it is also about the way in which we build an environment for our industry that will make Canadian aerospace companies more innovative and competitive on a global scale, and more able to attract business from airlines and operators all over the world.

Thanks to the strength of our industry and to smart investments in innovation, such as these centres of excellence, we are confident that Canadian companies will continue to win contracts with Air Canada and with other airlines and operators. We believe that Bill C-10 takes an approach that is necessary for Canada's future aerospace growth. It supports innovation, competitiveness, and Canadian growth at home and in the global marketplace.

Thank you very much. I would be happy to answer your questions.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I am calling to order meeting number 12 of the Standing Committee on Transport, Infrastructure and Communities of the 42nd Parliament, first session.

I would like to welcome our witnesses, both via teleconference and in the room with us. We very much appreciate your taking time out of your schedules to come in and help us with the review of Bill C-10.

In the room right now we have Jim Quick, president and chief executive officer of the Aerospace Industries Association of Canada, and Ronnie Di Bartolo and Jean-Pierre Bastien from the Premier Aviation Overhaul Centre.

Via video conference we have Yves-Thomas Dorval and Benjamin Laplatte from the Quebec Employers Council.

I would like to welcome all of you.

I will go to Mr. Quick first. Would you like to lead off, please?

Budget Implementation Act, 2016, No. 1

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, an aspect of this budget that I think we can really treasure is the fact that the Government of Canada believes in rural Canada. There are a number of initiatives to support rural communities. One of the biggest things is recognizing the importance of the Internet to rural communities, whether for private use or small business use. There are ways we can expand that and look at diversifying rural communities so that they are not as dependent on one or two businesses.

We believe that we need to invest and to be there, and that is one of the reasons the Minister of Agriculture and Agri-Food has spoken so avidly about the importance of supply management. It is one of the reasons for some of the changes in Bill C-10. It is not just the city of Montreal but the entire province that is incorporated in terms of the potential for our aerospace industry, and that same principle applies for Manitoba and Ontario.

It is a different attitude. It is an attitude that shows we understand the importance of rural Canadians and their way of life. We want to be there to support them in a very real and tangible way.

Air Canada Public Participation Act — Speaker's Ruling

[The Speaker, Liberal, Geoff Regan]

I am now prepared to rule on the question of privilege raised on April 22, 2016, by the hon. member for Montcalm regarding alleged misleading statements made in the House by the Minister of Transport and the Parliamentary Secretary to the Minister of Transport with respect to BIll C-10, an act to amend the Air Canada Public Participation Act and to provide for certain other measures.

I would like to thank the hon. member for Montcalm for having raised this matter, as well as the Minister of Transport for his comments.

In presenting his case, the member for Montcalm alleged that both the Minister of Transport and the Parliamentary Secretary to the Minister of Transport deliberately misled the House by repeatedly providing inaccurate information with respect to Bill C-10 in response to oral questions and during debate.

In particular, the member claimed that the statements, which pertained to the status of litigation regarding Air Canada’s obligation to keep aircraft maintenance operations in the province of Quebec, had been refuted by the government of that province. The federal government’s assertions, he argued, led members of the House to make decisions in relation to Bill C-10 based on false information.

The Minister of Transport, for his part, stood by his statements, while pointing out that the federal government was not privy to the negotiations between Air Canada and the government of the Province of Quebec. He concluded that, in his opinion, the matter raised did not constitute a question of privilege, but was more a question of debate.

The House of Commons is a debating chamber where opposing views are passionately held and vigorously defended, and where opposition members have a duty to hold the government to account. Consequently, the need for members' access to truthful and accurate information is primordial and goes to the heart of their role and privileges as legislators.

In fact, feisty exchanges during debate and disagreements as to facts are not infrequent; the member for Montcalm acknowledged this when he stated that he understood “that disagreements between members are to be expected and are fodder for debate”.

Not surprisingly then, the allegation that a member deliberately misled the House is a most serious one. In adjudicating such matters, the Speaker has a defined but very limited role, one which prevents the chair from judging the content or accuracy of statements made in the House.

As Speaker, my role is strictly limited to determining whether, in the course of debate, a member has deliberately misled the House.

Successive Speakers have clearly set out the three conditions that must be demonstrated in order for a Speaker to arrive at such a finding. My predecessor outlined them in his ruling of April 29, 2015, when he stated at page 13197 of Debates:

…first, the statement needs to be misleading. Second, the member making the statement has to know that the statement was incorrect when it was made. Finally, it needs to be proven that the member intended to mislead the House by making the statement.

As members can appreciate, the threshold is very high, purposely so given the seriousness of the allegation and its potential consequences for members individually and collectively. From this, it stands to reason that a finding of a prima facie case of privilege is an exceedingly rare occurrence in cases with respect to disputed facts.

Speaker Jerome understood that such situations are rarely grounds for finding a prima facie question of privilege when he stated on June 4, 1975, on page 6431 of Debates that:

...a dispute as to facts, a dispute as to opinions, and a dispute as to conclusions to be drawn from an allegation of fact is a matter of debate and not a question of privilege.

In the present case, no evidence has been brought forward to demonstrate either that the Minister of Transport knew that the statements he made were misleading at the time that they were made or that he intended to mislead the House.

Therefore, while the member for Montcalm has illustrated that there is a difference of opinion as to the interpretation of certain facts, it is clear to the Chair that the threshold for determining that the House was deliberately misled has not been met. As such, the Chair cannot conclude that members have been impeded in the performance of their parliamentary functions. Accordingly, I find that this matter is a dispute as to facts and not a prima facie question of privilege.

I thank hon. members for their attention.

Air Canada

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, on the contrary, I am in no hurry. In fact, I will speak very slowly to explain to my colleague.

We decided to change the legislation through Bill C-10, as I have been saying from the beginning, because the governments of Quebec and Manitoba decided to drop their lawsuit against Air Canada. This gives us the opportunity to clarify the legislation and give Air Canada more flexibility in making decisions regarding the maintenance of its planes.