Good afternoon, Mr. Chair and members of the committee.
My name is Massimo Bergamini, and I am president and CEO of the National Airlines Council of Canada.
I want to thank you for the opportunity to appear today to provide my organization's perspective on the upcoming federal budget.
The National Airlines Council of Canada was created in 2008 by Canada's four largest airlines—Air Canada, Air Transat, WestJet and Jazz.
Our members carry more than 92% of Canada’s domestic air traffic and 65% of its international air traffic, and they employ over 50,000 Canadians directly and contribute to an additional 400,000 jobs in related sectors, such as aerospace and tourism. Those are significant statistics, which reflect the role that a strong, competitive aviation industry plays in ensuring Canada’s economic prosperity. Today in Canada, commercial aviation has become the only practical way for millions to travel, to be with family, for work, or simply to explore our vast country. And travel they do.
According to Statistics Canada, the total number of passengers emplaned and deplaned in Canada increased by some 30% between 2008 and 2016. The era of elite jetsetters is long past. For Canadians, flying is now part of daily life and the lifeblood of an open, diverse, and geographically dispersed society. The 2016 Canada Transportation Act review, also known as the Emerson report, recognized this in its detailed aviation chapter.
Beyond the numbers, we cannot lose sight of the fact that air transportation is first and foremost about people. As people now book flights as readily as they drive cars, air travel has become the domain of the middle class, not the one per cent. Commercial air travel is not a luxury in Canada, yet Canada’s current policy framework treats it that way.
Our current system fails to recognize that air transportation serves both individual air travellers and the country’s larger social and economic interests. Adding costs to air travel in the form of airport rents, fuel taxes, security fees, and now likely a carbon tax, stifles our global competitiveness and penalizes the people whom air transportation is meant to serve. Given the demographics of air travel today, let’s call it what it is, another set of taxes on the middle class.
The Emerson report recognized how mounting fees and charges, as well as delays in security screening, affect travellers and the efficiency of the industry. It recommended phasing out airport rents, reforming the user-pay policy for air transport, and putting in place regulated performance standards for security screening. We urge your committee to recommend that the Government of Canada support the key competitiveness proposals of the Emerson report and put in place multi-year financial commitments starting in next year’s federal fiscal framework.
I would now like to add a few words about for-profit airport privatization.
First of all, to be clear, we are not opposed to for-profit airport privatization on ideological grounds. Our concerns stem from our understanding of the international experience.
Australia, a country with a similar geography and population density, has tried airport privatization, and their experience is instructive.
As the Australian consumer protection agency reported this spring, privatization resulted in massive increases in costs for airlines and travellers alike. Since their transfer to not-for-profit airport authorities in the 1990s, Canadian airports have successfully leveraged billions of dollars in user-generated revenues to grow into successful global transportation hubs recognized as the most efficient in the world. Adopting a business model that puts profit first risks damaging these hubs, hurting travellers, communities, and regions.
Under this model, protecting travellers would require strict regulatory controls on the ability of the privatized airports to set rates and fees, as well as the mandating of strong service standards. This, of course, creates a catch-22 for government, as strict regulatory consumer protection would reduce the value of these assets in the marketplace.
This is why our organization has urged Finance Canada to make public the market surveys that it has on this matter as well as the economic models it is using to arrive at an optimal regulatory framework. The discussion around airport privatization should be done in public and with all of the relevant data available for scrutiny. The stakes are too high for travellers, for airlines, for communities, and for Canada to follow any other course.