Thank you, Mr. Chair, and good afternoon.
Mr. Reble and I are here to speak to the committee today about the proposed amendments to the Aviation Industry Indemnity Act.
As a bit of background, the Aviation Industry Indemnity Act authorizes the Minister of Transport to issue one or more undertakings to Canadian aviation industry participants to provide coverage for aviation war risks that is consistent with commercial coverage, in circumstances where commercial coverage is not practically available.
These amendments amend the Aviation Industry Indemnity Act, or AIIA as we refer to it, to authorize the Minister of Transport to undertake to indemnify, first, Nav Canada for acts or omissions it commits in accordance with an instruction given under an agreement entered into between Nav Canada and Her Majesty respecting the provision of air navigation services to the Department of National Defence, and second, any beneficiary under an insurance policy held by an aviation industry participant.
In the case of Nav Canada's provision of service to the Department of National Defence or the Canadian Forces, the provision of an indemnity will, at minimum, be dependent on the signing of an agreement between Nav Canada and the Government of Canada that outlines what services will be provided to the Canadian Forces. These services will further the government's national defence mandate, not Nav Canada's civil air navigation services mandate. It has therefore been determined that it is appropriate for the government to assume responsibility for liabilities that may arise from actions taken by Nav Canada on the instruction of the federal government pursuant to such an agreement.
The intent of this act is to ensure commercial equivalent aviation war risk coverage is available to Canadian aviation industry participants if it is not practically available through commercial markets. As the act is currently drafted, beneficiaries named under a policy held by a participant can only receive funds through that participant. They cannot be paid directly. This is not consistent with commercial practice.
The amendments will ensure that, for example, if the participant becomes bankrupt, the beneficiary will still receive any indemnity that may be owing, through the government's indemnity. In both cases, the amendments will authorize, not guarantee or require, an indemnity to the relevant aviation industry participants or their beneficiaries. In either case, the decision whether to provide an indemnity will be subject to a determination by the Minister of Transport.
The government, led by Transport Canada, negotiated with Nav Canada an indemnity for their support of the Department of National Defence in December 2018. Should the two parties deem it appropriate to replace this indemnity with an indemnity under this act, Transport Canada would work with Nav Canada to negotiate the terms of that new indemnity.
I'm ready to answer any questions that the committee might have.