Health Committee on June 22nd, 2020

[Ferio Pugliese]

Maybe I'll underscore the fact that these vouchers that exist are non-refundable vouchers that the customers have purchased. What's important to note is that, and I'll speak on behalf of Air Canada, we've reimbursed over a billion dollars in refundable tickets back to the travelling public. Those reimbursements have been issued.

In addition to that, we've also made modifications post-pandemic to our travel policies whereby we are allowing the vouchers to not expire but also be carried forward, and be transitioned and transferred into Aeroplan equity points. We've done that, and we've made those adjustments retroactive to March.

[Luc Thériault, Bloc, Montcalm, QC]

I see that our conversation about this will not be a quick one.

You have come to tell us that you want the borders reopened and travel restrictions and quarantine measures relaxed. But we know that 50% of community spread comes from individuals who are not showing, or have yet to show, any symptoms.

You say you can guarantee safe travel, but the mere fact of travelling carries a risk of spread. You say that you can open corridors in countries where infection rates are acceptable or low, but you still need to know whether these countries have adequate detection and screening.

Detection is certainly essential and I will give you an example. At the beginning of the crisis, we focused on mainland China, which had already put measures in place. But many people from Quebec went to Europe and when they came back, Quebec ended up having quite a few more cases than elsewhere in Canada.

So what is your plan and how can you ensure that reopening borders and easing travel restrictions and quarantine measures will still allow us to deal with a second wave of the virus?

[Dr. Jim Chung]

These are just my thoughts on that. Firstly, at the initial outbreak of this pandemic, there was not a lot of information, unfortunately. We're learning as we go along, quite frankly. Where we are now with the knowledge of COVID-19, its pathogenesis, essentially its incubation period, the fact that there is a percentage of asymptomatic and presymptomatic carriers and the potential spread are some things that we didn't know early on in January and February.

Having said that, the work for opening up the borders, that's not done by me alone. I would certainly not make that determination. That would be done in consultation. That would be driven by government, participating with all the stakeholders, including the aviation industry and Canadians in general, on determining what those factors are that would minimize the risk as much as possible.

I know that it's not going to be zero, but we need to minimize the risk as much as possible, be that setting up certain measures for the other country in terms of its case rate, its positive infection rate, the number of tests they do per capita, etc. These factors would really have to be worked on and determined, but that would be in collaboration with all stakeholders, including government, the public and the aviation sector.

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Thériault.

We'll go now to Mr. Davies.

Mr. Davies, please go ahead, for six minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for taking time out of what I know is a very busy time for you to be with us today.

Recently the CEOs of Air Canada, WestJet and Air Transat signed an open letter to the Prime Minister and the premiers that said, among other things:

The mandatory 14-day quarantine and complete closure of our country to all visitors from abroad is no longer necessary and is out of step with other countries across the globe.

Given that Canada's chief public health officer, Dr. Theresa Tam, has called the mandatory 14-day quarantine period of all international arrivals “a cornerstone” of federal pandemic policy, I'm just wondering what your response to that would be. Is Dr. Tam wrong?

Any one of the three airlines can answer.

[Ferio Pugliese]

I'll start, and maybe ask Dr. Chung to comment as well, and others.

I don't suggest it's wrong, but I guess when we look at that, as we assess it, we look at other parts of the world. In fact, even in Canada, you have medical officers and medical directors within provinces who have lifted the 14-day quarantine. This only leads us to preclude that we're probably at a state in time, unless the curve in these various places is still running rampant—and we know that you have—

[The Chair, Liberal, Ron McKinnon]

Mr. Pugliese, could you hold up your mike, please, or get closer to the mike?

[Ferio Pugliese]

Unless we know there is a high-risk area. I mean we're seeing parts of the globe on an ongoing basis, and, like you said, even here within Canada, where the 14-day quarantine measures are being lifted.

I'm not here to disagree with Dr. Tam, I'm not a doctor, but there are several doctors and medical practitioners around the world who are making contrary decisions in cases where they're seeing measured approaches to reducing the curve, the contact, and the caseload, and where that happens we should allow it to open.

[Don Davies, NDP, Vancouver Kingsway, BC]

If I might ask, where in Canada are we releasing the 14-day quarantine period?

[Ferio Pugliese]

There are provinces within Canada that don't have a 14-day quarantine period.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay.

I'm not sure who it was, but someone believed we're entering a “stability phase”.

I agree with all of the comments that have been made that we are feeling our way through this pandemic, that there is no guidebook, but I think it's becoming fairly obvious that countries that have seen a reduction in their cases and have relaxed their approaches are starting to see flare-ups. We've seen them in Australia and New Zealand. They are happening in over 25 states in the U.S. It seems possible that when we think we can relax our standards, we may be actually walking into a second phase. Dr. Bonnie Henry of British Columbia has stated repeatedly there has never been a pandemic in history that did not have a second wave.

Given that the airlines are clearly requesting relaxation on a number of fronts, are you not concerned we may be walking into another flare-up, and if so how would you respond to that?

[Jared Mikoch-Gerke]

Mr. Chair, I'll take a stab at that question, and then I'll pass it along to my colleagues as well.

I think collectively, as an industry, our primary objective is to ensure the health and safety of our people and the travelling public. As we've seen, this is a very complicated and evolving crisis and the 14-day quarantine is a challenging component of the industry restart. Going forward, I think what we would be looking for is to continue to seek alignment with standards and guidance from internationally recognized bodies and move towards the easing of restrictions in a prudent and calculated manner.

One of your questions was about how many provinces have eased their 14-day quarantines. Within Canada alone, if we look at provincial restrictions, we have about half of the provinces across Canada that don't have 14-day quarantines for intracountry travel. I think as a first step what we certainly want to look towards is a consistent national strategy on how we open up the country to Canadian travellers. From there I think it will give us a good opportunity to assess what the impact will be. I think we're all highly concerned about a second wave. That's something we're certainly aware of, but we're implementing all of these health measures to try to reduce that as best possible. We just have to have a calculated strategy report.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

If I could just stay with WestJet, you made a reference to your adoption of seat blocking during the critical phase. I take it that was to comply with the guidelines on physical distancing. Are you still seat blocking, and if not, could you provide your rationale for why not, and if you are, why you are continuing to do so?

[Jared Mikoch-Gerke]

With respect to spacing in the cabin and seat blocking, that was a measure that we undertook of our own accord. It was not because we were regulated to do so or had any means to do so. We did take it as an interim measure. We have always said that it might not be permanent, but in the midst of the crisis, we made the decision to provide some distancing inside the cabin.

As we continue to move through the crisis, we're going to continually look toward the current industry guidance and international guidance, and we will continually review all of our policies, including this one, on a regular basis.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

To Air Canada, at the end of May, you announced that you would no longer use the federal government's emergency wage subsidy and instead opted to lay off about 20,000 staff, including flight attendants, mechanics and customer service agents. Can you explain to us why your airline made that decision?

[Ferio Pugliese]

Yes, I can answer that question.

I just want to clarify as well, with regard to your previous question, that when I mentioned the 14-day quarantine, as Jared mentioned, I was referring to interprovincial travel within Canada.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Can I just clarify that too? I think it's an important point. Are we talking intercountry or intracountry?

[Ferio Pugliese]

It's intracountry, so travelling province to province, but Canada itself as a whole has a 14-day quarantine—

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chair, could the witness just briefly answer the question that I asked him? I think he clarified and he did want to add something to explain why Air Canada made the decision, so I'll ask him for a brief answer to that.

[The Chair, Liberal, Ron McKinnon]

Answer very quickly, please.

[Ferio Pugliese]

Yes, I can answer that, and it's not because I didn't want to answer the question. I wanted to clarify your previous question, so hopefully that—

[Don Davies, NDP, Vancouver Kingsway, BC]

I realize that.

[Ferio Pugliese]

Thank you.

I think what is important to know is that we still have a thousand people who are on the CEWS program.

As for the CEWS program, we chose to not continue with it because of the shutdown of the borders and the decline in our business. Essentially we're running a 5% business. We can't continue to employ those people for the long term, and the CEWS program on its own does not provide adequate relief overall for us to continue to operate. It's not a free program. There's still an extensive expense and a cash burn that's associated with it, which comes along with payroll taxes, pensions and benefit costs.

In addition to that, because we don't see our business recovering for another three years, it would mean keeping that level of staff on board knowing that we're not going to be in a recovery position to sustain that level of staffing in the near term. Hence, we've kept a thousand on board in anticipation that if the economy does open up and travel restrictions and border restrictions and quarantine measures and so on are eased, by the time we hit the end of this year, we might see ourselves recouping about 25% of our business, which would allow us to take those thousand people and put them back into full-time jobs. Hopefully—

[The Chair, Liberal, Ron McKinnon]

Thank you, Mr. Davies.

We go now to our second round with Mr. Jeneroux.

Mr. Jeneroux, please go ahead for five minutes.