Evidence of meeting #34 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was passengers.
A video is available from Parliament.
4:05 p.m.
Conservative
Ted Falk Conservative Provencher, MB
You've also had an opportunity to look at the Air Canada deal a little more closely. We've talked about the fact that there's no enforcement mechanism to ensure that passengers are getting their refunds. We've also talked about how Air Canada revised its policy to say that in the future it may not refund money to its passengers.
Are there any other aspects or elements of the agreement that concern you? Can you break it down a little further?
4:10 p.m.
President, Air Passenger Rights
From a taxpayer perspective, which I believe is of interest to this committee, the primary concern about the deal is that taxpayers end up funding the refunds for passengers instead of Air the Canada shareholders who reaped the profits.
It was a pleasure to listen to the other witness today about how much even a few tens of thousands of dollars can buy and how much difference it can make in the lives of people who direly need assistance. Instead of the money going to those people, a lot of taxpayers' money has been sent to a for-profit corporation, with private owners, that has misappropriated passengers' money, and now taxpayers are making up for the shortfall. That raises significant concerns of transparency and accountability. Normally, there should have been accountability for the corporation, the shareholders, and the senior executives who were involved in misappropriating passengers' money.
4:10 p.m.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chair.
When you look at the airline industry in general, you see that it obviously needs some kind of support. The support that was provided recently is not perfect, but it is support.
Are there any other suggestions you could make to this committee on how support going forward could be better tooled or better structured, and might meet the needs of the airline industry while also providing fairness to the taxpayers and passengers?
4:10 p.m.
President, Air Passenger Rights
First of all, I'm not sure if Air Canada was that much in need of national support as they claim. There were, perhaps, other airlines that were, but Air Canada went into this crisis, this pandemic, in a very good, strong financial position.
In terms of support, money should go primarily to restructuring for improving service and making services better, for better technology, for expenses that make the industry as a whole more competitive, and not just padding the executives' pockets or the corporation's coffers.
Also, money spent on preserving the skills of aviation workers and ensuring that they keep up with their training and their skills is definitely a good public money investment, because while the corporations and the shareholders are dispensable, the aviation workers are not. They are a national asset.
4:10 p.m.
Conservative
Ted Falk Conservative Provencher, MB
In addition to that, they have been taking full advantage of the 75% wage subsidy as a company.
4:10 p.m.
Liberal
4:10 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Thank you, Chair, and thank you to both of our witnesses.
I'll focus my questions on the issue of housing in small communities.
Ms. Cameron, it's good to see you here. Thank you so much for joining us today and for your testimony.
One of the reasons I'm particularly intrigued by your testimony, Colleen, is that we obviously have put forward a lot of funding toward housing through the national housing strategy. It works fairly well for really big operators that have full-time paid staff. I have had the benefit of working to assist on some of the projects you mentioned and I fully appreciate the lengthy period of frustration you're going through as you work towards finalizing support for the next build.
I'm curious if you have advice for the government on how we can improve access to the national housing strategy funding opportunities for small communities that may rely so heavily on volunteers, as your organization does.
4:10 p.m.
Chair of Board of Directors, Antigonish Affordable Housing Society
Thank you, Sean.
I do have advice, as you know I always do.
One of the biggest challenges now with the national housing strategy is that when we built our last building, we got funding from our municipal governments and from Housing Nova Scotia. We did a lot of fundraising and we were successful in that, but since then the housing strategy has rolled out. When we went to Housing Nova Scotia, expecting a significant contribution to our new build, they said, “We're not doing that. You go to CMHC.”
Housing Nova Scotia has given us some money, but the bulk of it is through CMHC, and I don't think CMHC is used to giving out money. They have been in the business of mortgages and loans. I heard Evan Siddall talk about protecting the money, using it wisely, which is very good, but it's such a challenge to get access to that funding.
From our perspective as a small organization that's totally volunteer, the amount of time and effort needed to go into that is absolutely phenomenal. We're treated exactly the same way as a large developer in downtown Vancouver. When we first did that last year, I was absolutely shocked at our assessment, because as a provider of 100% affordable, energy-efficient housing with solar panels, we weren't given the points that I thought we should have had. A big developer could have 30% of their housing affordable for 10 years only, and have no barrier-free units, which cost a lot more money, and that really didn't help us a lot. It's the assessment that we are all the same that is not right.
The other thing is that the government has talked a lot about.... Big developers not being interested in rural areas; they go for the big ones. Community organizations have been trying for years to be able to access funding. We are one of the very few small organizations that have succeeded, so there's something wrong in that process. To me, there should be separate processes for community non-profit organizations and large developers.
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Are you thinking of smaller-scale projects that have smaller total dollar numbers but with an easier administrative burden?
4:15 p.m.
Chair of Board of Directors, Antigonish Affordable Housing Society
It's going to be smaller dollar numbers anyway. We're building 12. We wanted to build 15. We couldn't get the funding, so we scaled back. It's not so much the amount; it's how we are being assessed. We are not making a profit. We cannot make a profit in our rents. We're there to build affordable housing. We're not getting profit for our shareholders.
Why do we have to go through such a big challenge of getting this funding? You have to have some stuff in place to account for the funding and so on, but if the government wants affordable housing in communities and trusts the organizations to do that, why do we have to go through so many hoops to do the work that, I think, governments really should be doing in the affordable housing business?
We're willing to do that, but it is beyond the pale. I know of community organizations that have given up. They said they can't do it. It's just not making sense.
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
Colleen, I do have one quick question left.
Mr. Chair, do I have any time left?
4:15 p.m.
Liberal
Sean Fraser Liberal Central Nova, NS
I'll skip to the last one on my list. You mentioned that with respect to the wage subsidy and CEBA, notwithstanding a bit of a challenge in the credit union process, generally speaking some of these supports—you mentioned the community support fund as well—were actually easy to access. They helped organizations like yours.
What lessons can we draw from those programs as we move forward to continue to support folks in communities like ours? What lessons can we draw from the COVID response that might actually lead to long-term permanent solutions for vulnerable Canadians?
4:15 p.m.
Chair of Board of Directors, Antigonish Affordable Housing Society
Making it easy to access the funding is a good lesson. We accessed the funding and we've been using it very well and we're reporting on it. We're very accountable for that.
As I said, having resilient communities that can withstand shocks is really where we need to be. We need much more affordable housing. That is an issue that is critical across the country. In rural areas.... We talk about the homeless in Halifax, but why do we have them? They leave Antigonish to get services there. They're coming from rural areas into the cities.
More affordable housing and easier access are what are important, I would think.
4:15 p.m.
Liberal
4:15 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
Greetings to all my colleagues, including Ms. Damoff and Mr. Masse, who are joining us today.
I'd like to thank both witnesses for being with us and for their presentations.
My first questions are for Mr. Lukács.
Thank you again for raising the important issue of travellers' rights. My first question relates to something in your presentation and the exchanges you had with Mr. Falk.
Looking at what's been done in other countries, what should the government have done to better protect travellers? What best practices have other countries adopted that we could have learned from?
4:20 p.m.
President, Air Passenger Rights
Thank you for the question.
The very first thing the government should have done was to declare and enforce passengers' fundamental right to a refund. This happened in the United States on April 3, 2020, when the U.S. Department of Transportation issued an enforcement notice. In the European Union, it happened first around March 18, 2020. The European Union even went as far as suing some of its own states to ensure compliance with passengers' fundamental right to a refund. Had the Government of Canada done so, it would have probably been much easier to provide industry-wide relief because there would not have been such a strong opposition to it, publicly.
The other aspect is that Canada should have followed the German model—Lufthansa's model—whereby the state assumes a substantial stake in the airline that is being bailed out in exchange for taxpayers' money. The 6% that was provided to Canada's taxpayers in the current deal is dwarfed by the 20% in Germany, which actually has an option to go all the way up to 25%.
The last point is that those loans that were given to Air Canada were all unsecured loans, with one exception. Maybe Air Canada doesn't have sufficient assets as collateral—I don't know, and that's something to investigate further—but in the absence of assets, equity is a reasonable way to ensure that taxpayers receive a return on their investment.
4:20 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
That's very interesting. Thank you very much.
As you said, the first part of the assistance will go to Air Canada first. We'll see what happens with the other airlines.
Why do you think the government waited so long—over a year—to act?
4:20 p.m.
President, Air Passenger Rights
It is difficult to understand the logic behind the government's failure to enforce passenger rights. The problem is a long-standing one, but the pandemic has brought the systemic issue to the forefront.
The Canadian Transportation Agency, which is the federal body that's supposed to enforce passenger rights, has, over the past six to eight years, turned from an independent regulator into effectively a lapdog of the industry. There is a serious concern of regulatory capture. Some of the lead was coming from that direction, but it also seems that the airline lobby is profoundly active and efficient in persuading the government not to enforce consumer rights. Instead, it lets the airlines do as they please.
4:20 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Okay. Thank you.
Could you talk briefly about the importance of having a system of competition among airlines?
Also, should travellers fear the consequences of a possible merger? For example, prior to the pandemic, Air Canada had proposed to buy Air Transat.
Finally, can you tell us about the importance of maintaining regional routes?
4:20 p.m.
President, Air Passenger Rights
With respect to the issue of competition, the deal between Air Canada and Air Transat would have significantly decreased competition over transatlantic routes and sun destinations. In terms of the data, for the medium-concentration to high-concentration market, this would have resulted in higher airfares and consumers paying more money.
Certainly Canada, even now, is suffering from a lack of adequate competition. What it would need to do is open our market for more airlines, even for the carriage of passengers within Canada—perhaps not all airlines, but airlines from trusted partner states—because it should not be a choice between Air Canada and WestJet only.
In terms of regional routes, it's a very tough question because, on the one hand, it may be very important for communities, but on the other hand, we cannot expect airlines to operate a route that is not profitable. If as a state, as a society, we decide that regional routes are important, then airlines have every right to ask for a subsidy for recovering those specific costs.
