Evidence of meeting #31 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was service.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

John McKenna  President and Chief Executive Officer, Air Transport Association of Canada
Marco D'Angelo  President and Chief Executive Officer, Canadian Urban Transit Association
Dave Wardrop  Chief Transportation and Utilities Officer, City of Winnipeg
Stuart Kendrick  Senior Vice-President, Greyhound Canada Transportation Corporation
Stéphane Lefebvre  President, Groupe Autocar Jeannois
Kelly Paleczny  General Manager, London Transit Commission
Clerk of the Committee  Mr. David Gagnon
Serge Buy  Chief Executive Officer, Canadian Ferry Association
Chris Reynolds  President, Air Tindi Ltd.
Maryscott Greenwood  Chief Executive Officer, Canadian American Business Council
Ron Lemaire  President, Canadian Produce Marketing Association
Diane Gray  President and Chief Executive Officer, CentrePort Canada
Bob Masterson  President and Chief Executive Officer, Chemistry Industry Association of Canada
Veso Sobot  Board Member, Coalition of Concerned Manufacturers and Businesses of Canada
David Sword  Board Member, Coalition of Concerned Manufacturers and Businesses of Canada
Richard Fadden  Former National Security Advisor to the Prime Minister, Advisory Council Member, Macdonald-Laurier Institute
Ghislain Gervais  President, Sollio Cooperative Group
Jonathan Berkshire Miller  Deputy Director, Centre for Advancing Canada's Interests Abroad and Senior Fellow, Macdonald-Laurier Institute

3 p.m.


The Chair Liberal Wayne Easter

I call this meeting officially to order.

Welcome to meeting number 31 of the House of Commons Standing Committee on Finance, and the first panel. Pursuant to the order of reference from the House of Commons, we are meeting on the government’s response to the COVID-19 pandemic.

Today’s meeting is taking place by video conference, and the proceedings will be made available on the House of Commons website.

I would certainly like to welcome all of our panellists. If you could try to hold your remarks to about five minutes, it will give a little more time for questions. This panel is about public transportation, but we'll likely veer a bit away from that from time to time.

To start with, we'll go with the Air Transport Association of Canada and John McKenna, president and chief executive officer.

The floor is yours, Mr. McKenna.

3 p.m.

John McKenna President and Chief Executive Officer, Air Transport Association of Canada

Good afternoon. My name is John McKenna, and I am the president of the Air Transport Association of Canada. I thank you for inviting me to appear before this committee.

I want to switch to French for one second.

For technical reasons, I will speak in English, but I will be happy to answer your questions in the language of your choice.

ATAC has represented Canada's commercial air transport industry since 1934. We have 180 members engaged in commercial aviation, operating in every region of Canada. Our members range from flight training organizations; local air taxis; and regional carriers that serve remote, northern and indigenous communities to very large carriers servicing Canada, the U.S. and international destinations for both business and leisure travel.

We welcome the opportunity to comment on the devastating impact that this pandemic and its containment measures are having on our industry. Although we support the government in its actions aimed at curbing the spread of COVID-19, containment and restrictions on air travel have had a truly horrendous economic impact on most segments of the air transport industry, with traffic and revenue down to less than 10% of usual levels.

Many of our members have ceased operations altogether. Air operators are counting on a financial aid package from the government, while some operators struggle to continue servicing northern and remote communities that rely on air transport for survival.

I believe that a significant number of air operators will probably not survive, unfortunately, and the quality of air services to Canadians will undoubtedly suffer.

Canada is lagging behind, as most foreign governments acted within weeks to come to the aid of their aviation industries, including the U.S.A., Australia, Brazil, China, Denmark, Finland, Germany, Hong Kong, Italy, New Zealand, Norway, Singapore, Spain and Sweden. Meanwhile, our letters to the Prime Minister, the Minister of Finance, the Minister of Transport, the Minister of Economic Development and the Minister of Indigenous Services remain unanswered.

Our industry is capital-intensive, with very high fixed costs. While little or no revenue is generated, operators still have to pay for their aircraft through loans or leases, insurance, basic regulation-required airworthiness upkeep, hangars, and parking fees in addition to all the other normal business overhead costs.

So far, the government has tabled the Canada emergency wage subsidy, which can only help pay for a skeleton staff when operations are all but stopped. Canada's large employer emergency financing facility program is interesting, but its $300-million threshold eliminates the vast majority of air carriers. We estimate that only five or six carriers qualify for this program, while over 30 other carriers—key socio-economic enablers in their regions, and critical to Canada's connectivity—are left out.

The Canadian government must recognize the critical role that aviation plays in Canada. Without immediate government help, many Canadian air operators will not be around to provide their critical service and its enabling role in the economy at the beginning of the long recovery when they will be most desperately needed.

The critical government financial aid package would also avoid greater economic damage by ensuring that operators can rapidly scale up when travel restrictions are lifted and quickly contribute to jump-starting the Canadian economy. However, some airlines may require more than loans if they are to continue providing essential service to Canadian communities.

Our industry is facing two major challenges. The first, of course, is short-term survival. The other is the uncertainty of what our market will look like coming out of this crisis, which is best summarized by the following questions: How long before people are willing and able to travel by air again? When will foreign borders open up and remain open? What health and safety restrictions will the government impose on our operations? Will those restrictions make the cost of flying prohibitive?

We expect that the impact of COVID-19 will last much longer than initially thought and that recovery will be very slow—and, unfortunately, even impossible for a number of us.

A comprehensive government action plan will help the air transport industry save over 55,000 direct skilled jobs, and many times that in indirect jobs; maintain essential connections; transport people who require medical treatment; deliver life-preserving supplies; and overall, be a key enabler for the recovery of the Canadian economy.

I thank you for your attention, and I am happy to answer any questions.

3:05 p.m.


The Chair Liberal Wayne Easter

Thank you very much, John.

We'll turn now to the Canadian Urban Transit Association. We have Marco D'Angelo, president and CEO.

Mr. D'Angelo, your mute is on.

3:05 p.m.

Marco D'Angelo President and Chief Executive Officer, Canadian Urban Transit Association

Thank you very much, sir. I apologize.

Thank you for allowing CUTA to appear before the committee today.

Let me start by directly addressing what I know many of you are asking: Why is keeping buses and trains running a federal issue? Why am I not appearing before a provincial committee? Very simply, why is this your problem to fix?

It's because in a time of national crisis, we need national leadership, the kind of national leadership that's been on display in Washington and London, where national governments believe public transit is in the national interest. That's the national leadership we need in Ottawa to bring provinces to the table, and I'm hopeful it will come. I know that the government knows how important cities are to this country and how important transit is to our cities, but the pandemic has hit transit hard.

Let me start by explaining where transit systems are today. Some of my colleagues on the panel can also speak to it in more detail.

Service has been reduced in many cities. Layoffs have been widespread. At the height of the lockdown, many systems saw ridership fall by 90%. In many cases, revenue was down 100% in systems that allowed for rear-door boarding to protect drivers and that did not collect fares. Let's not forget that transit isn't just within cities. For large parts of the country, it's how people in smaller towns and cities can get to larger centres. It's through some of our other providers. Private providers saw ridership and revenue plummet by about 95% in the same time.

None of this is news. None of it's surprising. When we lock down, people don't take transit as much, but let's think about the roughly one million people a day who are continuing to take transit. They're doing essential work on which we all depend. They're disproportionately low-income people. They keep our grocery stores running. They clean our hospitals and nursing homes. They are the most likely to take a bus to work.

When transit systems collapse, here's what will happen: After a day on the front line, a nurse may wait longer to see his or her family. The grocery clerk will have to get up earlier to spend a day in harm's way. Vehicles may remain crowded.

These people don't deserve a lesson on jurisdiction. They deserve better than hearing why airlines can be helped, but not them. What they deserve, and what Canadians deserve, is a recognition that allowing cities to fail because their transit system has failed is no plan at all. It's no plan for the essential workers we transport today. It's no plan for our cities as the economy begins to reopen. It's no plan for a long-term recovery in which transit systems will simply not be able to take part because we can't keep running our buses and trains empty forever.

I know the federal government doesn't want this problem, but I believe it can help solve it. It knows how important transit is to our cities. The government wants transit to keep running for those essential workers who depend on it every day, and because it will need to be there tomorrow, as the economy reopens. As has been said so often during the pandemic, the fact is that we're all in this together, the federal government included.

That is why I'm here: to ask for your urgent help, because time is running out.

Thank you.

3:10 p.m.


The Chair Liberal Wayne Easter

Thank you very much.

We will turn now to the City of Winnipeg and Dave Wardrop, who is the chief transportation and utilities officer for Winnipeg.

Go ahead, Mr. Wardrop.

3:10 p.m.

Dave Wardrop Chief Transportation and Utilities Officer, City of Winnipeg

Good afternoon, Mr. Chair and members of the committee.

Thank you for the invitation to join you today. The City of Winnipeg appreciates the opportunity to appear before the House of Commons Standing Committee on Finance this afternoon.

I'd like to provide you with a brief overview of our current situation in public transit as well as our broader transportation and utility systems.

In recent years the City of Winnipeg has been working on a number of initiatives to make public transit more effective and affordable. This trend has continued in 2020, with Winnipeg's commissioning of stage 2 of the southwest rapid transitway, which was achieved well under budget and ahead of schedule. Work is also proceeding on the development of Winnipeg's transit master plan.

However, the COVID-19 pandemic has changed the landscape for municipal services, confronting all city programs and services with major challenges. Our city as a whole is anticipating a cumulative shortfall of $73 million in 2020, provided the impacts of the event have subsided by the end of August. Impacts of COVID-19 beyond the end of August could be expected to have even more severe financial implications.

Winnipeg has implemented a COVID-19 management plan to help mitigate the effects that the crisis is having on the City of Winnipeg. This plan includes public transit service reductions and staff layoffs. Still, even with these measures, there will be a drawdown on the city's financial stabilization reserve fund.

The delivery of public transit has proven to be a substantive part of Winnipeg's operational challenges. Ridership has fallen by approximately 72% since the same period last year. As of April 30, Winnipeg Transit's lost revenue has amounted to $7.1 million, and this amount could rise to $28 million by the end of 2020. As a result, Winnipeg Transit has reduced service by introducing an enhanced Saturday schedule on weekdays and has made the extremely difficult decision to lay off 246 bus operators on a temporary basis.

These layoffs are in addition to the 674 staff who were laid off as part of Winnipeg's COVID-related closure of recreation centres, pools, arenas and libraries, for a total of 920 COVID-19-related layoffs to date.

In addition to regular transit operations, the COVID-19 crisis has greatly complicated the opening of stage 2 of the southwest rapid transitway and the launch of other transit programs, such as Winnipeg's low-income bus pass. Furthermore, the impact on customers could extend well into the COVID-19 crisis, and even beyond. How long it will take to rebuild transit ridership is a crucial but open question.

The impact of the crisis on our employees is also a concern for the City of Winnipeg. Following the temporary layoffs, some employees' confidence will undoubtedly be shaken. Some may take early retirement and some may seek employment elsewhere. As such, Winnipeg Transit faces not only the challenges associated with lowered workplace morale and increased workplace stress but also the real, tangible costs associated with workplace turnover and the need for additional overtime, recruitment and training that result from turnover. Underlying and further aggravating all these issues is the unprecedented uncertainty the city is facing going forward.

In response to this challenge, the City of Winnipeg has quickly and effectively adapted the manner in which it provides transportation and utility services.

Some examples of this include the Winnipeg Fleet Management Agency's new protocols to protect staff, including the rental of additional vehicles to ensure safe physical distancing.

The Winnipeg Parking Authority has relaxed parking enforcement in recognition of altered patterns of activity and physical distancing needs—not, however, without further negative financial implications.

To protect staff and the public, Winnipeg's Water and Waste Department has suspended many regular in-home services and has also suspended water turnoffs for nonpayment of bills and late fees.

To ensure proper physical distancing, Winnipeg's public works department has developed new flood control operational protocols for activities such as filling sandbags and building dikes.

Traffic signal timings have been adjusted to accommodate the changing volumes of traffic on city streets, and solid waste and recycling crews have been stretched as the volume of residential garbage and recycling has increased significantly.

In response to the changing operational landscape resulting from the COVID-19 pandemic, Winnipeg Transit, as a front-line service provider, has also implemented comprehensive cleaning and safety protocols.

Winnipeg's transportation and utility staff, and staff across all City of Winnipeg departments, have made exceptional efforts to meet the goals of the Winnipeg pandemic recovery framework.

I would like to take this opportunity to thank the City of Winnipeg staff for their commitment and adaptability, and also the residents of Winnipeg, who are working with us to slow the spread of COVID-19. In an uncertain time, we appreciate the certainty of their goodwill.

Thank you again for the invitation. I would be happy to take any questions you might have.

3:15 p.m.


The Chair Liberal Wayne Easter

Thanks very much, Mr. Wardrop.

We'll turn next to Greyhound Canada Transportation Corporation and Stuart Kendrick, senior VP.

Stuart, the floor is yours.

3:15 p.m.

Stuart Kendrick Senior Vice-President, Greyhound Canada Transportation Corporation

Thank you very much.

Good afternoon to the committee, and thanks again for the invitation to speak today.

I'm Stuart Kendrick, the senior vice-president of Greyhound Canada. I've proudly worked for this great company for 33 years. I started as a baggage handler in London, Ontario. Today I'm the person responsible for managing Greyhound's business in Canada.

Almost immediately after the COVID-19 lockdown began, our ridership declined by 95%. Despite our best efforts to reduce costs by gradually reducing service, and our significant outreach efforts to the government, we simply could not continue operations without financial support. We do not receive any government subsidies like some of our competitors, such as VIA Rail and some municipal and provincial transit operations that also provide intercity travel. We're completely reliant on the fare box revenue to survive.

Greyhound is also a member of a coalition of regional intercity bus companies from across Canada whose operations have been similarly impacted. These companies include Wilson's Transportation, which operates in the province of British Columbia; Maritime Bus, which operates in P.E.I., New Brunswick and Nova Scotia; Orléans Express, which operates in Quebec; and Coach Canada, which operates in Ontario and Quebec and into the United States, as does Greyhound Canada.

Before COVID-19, the coalition employed about 1,400 people, serviced hundreds of communities across the country and carried several million Canadians annually, but on May 12, after incurring weeks of significant losses and with no financial support from governments in sight, Greyhound suspended services in Canada. This shutdown has meant that approximately 400 Greyhound employees in Ontario and Quebec have lost their jobs, and our customers were left without service.

I want to spend the rest of my time with you today talking about our customers.

Thirty percent of our riders are students. We help them get to college or university and to visit their families for the holidays. Not everyone in this country has parents who can afford to fly them home for a long weekend or who have a car to drive hours to pick them up. They rely on us, the bus carriers.

Twenty-five percent of our riders are seniors. Often on fixed incomes, seniors ride our buses to get to medical appointments in the city when the care they need isn't available in the small town or rural community. They ride our buses to visit grandchildren. They don't want to drive, or are not interested in driving on a busy highway. They rely on the bus.

Sixty percent of our riders are women. Among them are single moms who need an affordable and safe way to travel with their kids. Our services are how they take their kids to the city to see friends and extended family, or for a special weekend, assuming they can afford some leisure travel. Our buses provide safe and comfortable transportation for women travelling to the next town for a job interview or to Women's College Hospital in Toronto for medical appointments. They rely on Greyhound.

Before the pandemic hit, 15% of our riders were unemployed and 40% of our riders were people with a household income below $25,000 annually. To be sure, these are not folks who are going to benefit from an airline bailout, as important as that may be. They're not Bay Street people. They're Main Street Canadians from small towns, rural communities and inner city neighbourhoods who are just trying to get to where they need to go. Whether it's for work, for family visits, or for some leisure travel when they can afford it again, they rely on the bus. These are the people hardest hit by this crisis: women, students and the working poor.

I'm here to tell you that as people start moving around again and as the economy opens up, these are people who are going to need affordable, reliable intercity busing to help them look for work, go to medical appointments, and finally, see their families again.

We have been asking the Government of Canada and the provinces for help. For the sum total of $26 million, the five members of our coalition could operate on a break-even basis by running at 50% of our pre-COVID capacity for six months.

In that regard, we noted Minister Duclos' recent statement to the CBC that there will be something for intercity busing “quickly”, he said.

We need your help so we can be there for Main Street Canadians. I urge this committee to give intercity busing a lifeline so that we can survive this difficult time and be there to provide transportation services to Canadians when the economy rebounds.

Thank you, committee, for giving me the opportunity to speak. I would be happy to take any questions.

3:20 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Mr. Kendrick.

We will turn now to Groupe Autocar Jeannois and Mr. Lefebvre, the president.

3:20 p.m.

Stéphane Lefebvre President, Groupe Autocar Jeannois

Good afternoon.

Thank you for having me appear before the Standing Committee on Finance. I am president of Groupe Autocar Jeannois, a company specializing in passenger transportation, specifically tourist charters. I am also president of the Fédération des transporteurs par autobus, which represents all types of passenger transportation in Quebec.

The announcement of the pandemic shook the bus industry in Canada and Quebec. All sectors of the industry's activity have been hard hit, especially tourist charter transportation. That is what I will talk about today.

In contrast to some industries that have remained partially operational, the tourism industry and the charter travel sector had to shut down all of their operations overnight. For us, the carriers, this represents a loss of $21.5 million in revenue per month since the beginning of the pandemic, in Quebec alone. It has never happened before. For your information, in my company specifically, which normally operates 45 vehicles in this industry, everything has shut down. As of June 30, losses will total about $3.1 million.

No one can predict if the recovery will happen soon. In this context, carriers need government support tailored to their reality. Passenger transportation by bus is essential for all Canadians and Quebeckers, as well as for those who come to discover our province or our beautiful country.

In Quebec, the chartered bus travel industry generates annual business of more than $240 million, not counting the associated economic spinoffs. If you include the rest of Canada, you could say the industry is huge. In Quebec alone, approximately 4,000 direct employees in over 160 independent companies operate more than 530 coaches in Quebec and the other Canadian provinces.

Beyond these numbers, all our sports teams travel from city to city to compete in numerous tournaments throughout Quebec and outside the province. Every year, our young students discover the impressive wonders and fast-paced life in major Canadian and U.S. cities. We must not forget our seniors, as well as the people and organizations that visit our museums and frequent the many performance venues. Everything has stopped. All entertainment, in all regions of Quebec, is shut down.

Charter transportation is therefore on full pause. The current crisis is forcing the cancellation of all these activities, which include numerous guided tours in all our major cities and, above all, our many tourist routes travelled by an impressive clientele from every corner of the world.

Since March, in Quebec alone, 18,000 contracts have been cancelled. For the period from March to June, this represents gross losses of $86 million in sales, or approximately 35% of the carriers' annual sales. If the crisis persists beyond the summer season, losses could total an additional $103 million, which would represent another 45% loss of our annual sales by the end of October. Because of the type of services we offer, it is during these periods of the year that our organizations conduct more than 80% of their business. These are colossal losses that jeopardize the survival of our organizations.

Independent carriers have a large structure and significant capital assets to support. Their level of financing, which is already very high, is marked by the purchase, maintenance and storage of a sophisticated and very costly fleet of vehicles.

For my organization and similar businesses in the industry, the catastrophic financial losses and the complete shutdown of operations have resulted in significant damage of another kind: the loss of our specialized workforce. It is difficult to retain professional drivers who must continue to work. Most of them turn to transportation companies of all kinds. In addition, despite capital tax holiday agreements, our financing structure and significant capital assets do not permit us to accumulate new loans.

Government support to meet our current cashflow needs is provided in the form of loans. To resume our operations and adopt all the measures for the safety of our employees and customers, financial and structural accommodations will have to be made.

Our industry has been hit very hard. However, because of the type of business we are in, we cannot reinvent ourselves to offer other types of services, as other industries are currently doing. Our industry will be one of the last to reopen and our financial burden will still be there. At the moment, we are facing a total lack of revenue.

Passenger transportation will be a key sector for the recovery of the Quebec and Canadian tourism industry. If this critical situation persists, hundreds of jobs and dozens of buses will not be there to adequately serve travellers and the general public.

Our industry needs special support so that Quebec's 160 companies can continue to help travellers from here and elsewhere discover not only our province, but also the other Canadian provinces. I include in this number all Quebeckers who visit the rest of the country.

If they receive adequate support to get through this historic crisis, our transportation companies will be ready and able to participate in the recovery of the tourism industry and the Canadian economy as a whole.

Thank you very much. I am ready to answer your questions.

3:25 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Stéphane.

Just before I turn to the last witnesses, for the members' benefit, the order of questions in the first round will be Todd Doherty, Peter Fragiskatos, Mr. Ste-Marie and Mr. Julian.

We are turning now to the London Transport Commission and Ms. Kelly Paleczny. Ms. Paleczny, the floor is yours.

3:25 p.m.

Kelly Paleczny General Manager, London Transit Commission

Thank you very much.

Good afternoon, honourable chairman and members of the Standing Committee on Finance. Thank you for inviting me today to discuss the impacts of the COVID-19 pandemic on public transportation.

My name is Kelly Paleczny, and I'm the general manager of the London Transit Commission in London, Ontario. I also serve as chair of the board of the Ontario Public Transit Association and I am an executive member of the Canadian Urban Transit Association.

I've been invited here today to speak to you on behalf of the London Transit Commission. Based on ridership, we are the 15th-largest transit agency in Canada. In 2019 we moved 24.9 million passengers and collected $34.2 million in revenues.

Our transit service provides Londoners with access to their community, bringing patients and employees to our city's hospitals, students to local high schools or Western University or Fanshawe College, workers to our industrial parks, or shoppers to every corner of our city.

Prior to mid-March of this year, the London Transit Commission was beginning work on an exciting new infrastructure project to bring bus rapid transit to London. The federal government committed to investing $123 million in our rapid transit initiative and supporting projects in 2019. The accessibility, frequency and reliability of public transit were set to improve in our fast-growing city. Our mayor has also recently outlined his intention to transition our fleet to zero-emission buses in the near future.

Then the pandemic hit. In response, in the interests of public health and in an effort to continue moving essential workers to and from their workplaces, our transit agency, like hundreds of others in Canada, moved to rear-door boarding of buses to encourage physical distancing between drivers and passengers. We also heightened cleaning and disinfecting of our fleet and maintenance facilities, among other measures, to ensure that the transit service is offered in a safe and sanitary environment for all.

These measures have been rolled out while our transit agency has forgone the collection of revenues in the interests of public safety. This deprives the London Transit Commission of our largest revenue source, but the service must continue to operate for essential workers as they continue to battle the pandemic.

In an effort to address the budget shortfalls associated with the lost revenue, London Transit has reduced service levels to approximately 70% of what they would normally be and cancelled the service improvements planned for the fall of this year. We have depleted two of our operating reserves in order to cover shortfalls through June and have now put the city on notice that we are out of funding options.

As in other provinces and territories, municipalities in Ontario are prevented from running deficits. This means that there is not much of a local funding backstop available for transit agencies in their hour of need.

It's critical for higher orders of government to support transit, given that they have the fiscal tools at their disposal that city governments lack. We urgently need federal and provincial support for emergency operating funding. This support will avoid doing decades of damage to our transit networks and reinforce our ability to decarbonize the public transit sector.

As our communities slowly begin to reopen and as our economy begins to rebuild, it's critical to have well-functioning public transit systems. We move people to jobs, appointments, attractions, classes and pretty much everything in between. We cannot afford to have our transit agencies on their knees and contemplating service cuts and layoffs while customers continue to return to our service.

Just this past week, as Ontario slowly began to loosen restrictions, we saw ridership increase by 10% over the previous week in London. Service reductions at this time will hamper our local and national recovery efforts and could encourage transit riders to move back to their cars.

I would like to thank members of this committee and members of the House of Commons for coming together to support Canadians during the pandemic. Your work and dedication have been exemplary. So, too, have been the efforts of front-line transit workers. It's time to support those efforts to ensure that our communities have the safe and reliable transit services they deserve.

Thank you for the opportunity to address the committee. I would be pleased to answer any questions.

3:30 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Kelly.

We will go to the first round for six minutes. We'll start with Mr. Doherty.

3:30 p.m.

The Clerk of the Committee Mr. David Gagnon

Mr. Chair, I'm sorry to interrupt. I just want to mention to you that we also have a witness from the Canadian Ferry Association.

3:30 p.m.


The Chair Liberal Wayne Easter

Oh, he's not on my list. We brought him in yesterday.

3:30 p.m.

The Clerk

It was a last-minute addition.

3:30 p.m.


The Chair Liberal Wayne Easter

That's right. I'm sorry. I think I said at the time that I couldn't believe how we missed the ferry service.

Okay, please go ahead.

3:30 p.m.

Serge Buy Chief Executive Officer, Canadian Ferry Association

Thank you, Mr. Chair.

I wanted to thank you for giving the Canadian Ferry Association a voice at the committee.

Our members transport over 55 million people, 22 million vehicles, and billions of dollars of goods—at least, they did until COVID-19. Ferry operators have seen a dramatic drop in ridership, which is to be expected with the situation we're in. However, as they provide a vital link to the communities they serve, we were asked to continue to provide similar services.

It's a vital link, yes, but who will pay the bill?

Let me first congratulate the elected officials, their political staff and the public service on the impressive effort to support Canadians and the Canadian economy during this crisis. However, when programs are created so quickly, they often need to be tweaked to better reflect the reality on the ground. This is not an exception.

I will raise three specific issues: eligibility under the Canada emergency wage subsidy program, with two examples, BC Ferries and the Ottawa River ferries; a program for vital transportation service; and the financial impact of temporary measures, should they be prolonged.

Let me give you the example of BC Ferries, which represents 35% of our sector. It provides crucial linkages to coastal communities in British Columbia. Some of you are living in those communities right now. It is a private company created by provincial legislation to deliver coastal ferry services in the province. It has one owner and is a not-for-profit corporation, but for tax purposes under the Income Tax Act, it is recognized as being owned by the Province of British Columbia. Eighty per cent of its revenues come from ferry users. With a decline of 80% in traffic, the losses have been staggering for the company, in the range of $1 million to $1.5 million per day.

Due to the unique nature of its ownership, its only path for eligibility under the Canada emergency wage subsidy program is to be declared a “prescribed organization”. Provincial ministers have written to their federal counterparts, and we have raised this issue ourselves numerous times. To date we do not have a response.

If BC Ferries is not designated as a prescribed entity, rest assured that this will have a dramatic impact, not only on the company, but on the whole sector in Canada. BC Ferries is a world leader in its class and is recognized as such internationally. The impact will be felt on the environment, on employment and on the recovery of the communities served.

This committee could recommend that BC Ferries be made a prescribed organization under the act. We hope you will act on this.

Some of our members, mainly located around the Ottawa River in Quebec and Ontario, as another example, are not eligible for the Canada emergency wage subsidy program as they had no revenues in March, April and May of 2019. This is due to the flooding that year from the Ottawa River, which prevented them from operating their ferries until mid-June to late June of 2019. These operators, their employees and the communities they serve see themselves victimized three times: by the flooding in 2019, by COVID-19 in 2020 and now by the inflexibility of the program. Surely we can't turn to them and say that they would have qualified if only one disaster had hit them but not if they have two disasters. Common sense will hopefully prevail.

We also need a program for vital transportation services, especially for those regulated by the federal government, regardless of the technicality of who owns them. They provide a service that is vital for Canadians and they need to be supported. They include private companies such as Oceanex, municipalities, first nations and provincial agencies. We can't ask organizations to keep delivering services for extended periods of time while getting no or almost no revenues from them and receiving no support.

I would like to raise one last issue. We also need to look at the impact of rules put in place by Transport Canada. One of those rules, as an example, asks that operators in some cases limit ridership to 50% of their usual capacity. This rule ends on June 30, but could be extended. If it is, who will compensate ferry operators for the continuing losses they will incur? We need some clarity on this question.

We have raised these issues numerous times. Most senior public servants we've talked to indicate that we're making a compelling case for both BC Ferries and our members affected by the flood to be included in the Canada emergency wage subsidy program. We just need to get it done. There is a clear need for organizations that provide vital links for Canadians. The government needs to urgently provide clarity.

Thank you.

May 26th, 2020 / 3:35 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Serge. My apologies for almost missing you twice.

We'll go to six-minute rounds.

Todd Doherty, go ahead.

3:35 p.m.


Todd Doherty Conservative Cariboo—Prince George, BC

Thank you, Mr. Chair.

This first question is for all of our witnesses. Just for confirmation, have you, as an individual association or as part of a national association, written letters to our federal government and pertinent ministers and have you received a response, yes or no?

I'll start with Mr. McKenna.

3:35 p.m.

President and Chief Executive Officer, Air Transport Association of Canada

John McKenna

We've written three letters and also supporting emails to the Prime Minister and numerous ministers of Parliament, including the Minister of Finance and the Minister of Transport. No, we've not received an acknowledgement.

3:35 p.m.


Todd Doherty Conservative Cariboo—Prince George, BC

Thank you.

Mr. Buy, I'll ask you the same question.

3:35 p.m.

Chief Executive Officer, Canadian Ferry Association

Serge Buy

We've written to the federal government, to ministers and ministers' offices. I have to say that we have received replies from political staff. We have not received any definitive reply, though.

3:35 p.m.


Todd Doherty Conservative Cariboo—Prince George, BC


Mr. D'Angelo, I'll ask you the same question.

3:35 p.m.

President and Chief Executive Officer, Canadian Urban Transit Association

Marco D'Angelo

Thank you. Our letter went in to the government at the end of March. Conversations are ongoing. We're optimistic that a solution will be here today. We're still working on getting the $400 million we've been calling for.