Evidence of meeting #37 for Indigenous and Northern Affairs in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tourism.
Member, Board of Directors, Yukon Historical and Museums Association
He comes up regularly and meets with us in Dawson. He has not mentioned that.
Conservative
John Duncan Conservative Vancouver Island North, BC
Okay, but CanNor is now up and running. This is a CanNor initiative and exercise.
Would you put that in the category of good news?
Member, Board of Directors, Yukon Historical and Museums Association
Yes. It gives me something to question him about at our next meeting.
Conservative
John Duncan Conservative Vancouver Island North, BC
Well, you have the CanNor people here now too, so I would encourage that conversation.
Another thing that was put on our radar involved two issues that have repercussions for the tourism sector that I didn't hear you talking about—mind you, I missed a couple of minutes—and that was the rental car issue between Yukon and Alaska, and also the border crossing closure issue on the Top of the World Highway. Are these fairly top of mind, in terms of the tourism sector?
Executive Director, Tourism Industry Association of the Yukon
I would say that the rental car issue is absolutely top of mind, and if there's any jeopardy in terms of a border crossing closing, especially in the summer months on the Top of the World Highway, that's definitely an issue.
The Top of the World Highway is basically a circle route. You take it from Dawson City over to Tok, Alaska. So if our rubber-tire traffic and our motorcoach traffic that are coming as part of the cruise tours can't get through, that's an issue.
Conservative
John Duncan Conservative Vancouver Island North, BC
We didn't have a lot of time to get into any detail on that border crossing closure, but I understand there's an opportunity to winterize the facility in order to extend its operation. What does that term “winterize” mean? Is it the structure, or is it much more extensive than that?
Member, Board of Directors, Yukon Historical and Museums Association
Perhaps I could speak to that.
I'm here representing the YHMA, but this is clearly a Dawson issue, because that's where the Top of the World Highway goes.
Yes, there is a question of winterizing the booth, and I think there are some technical requirements in terms of water and sewage disposal that need to be addressed to allow those things to work in the wintertime.
More important than that is whether or not the Americans plow the other side of the road. You can have a lovely winterized booth, but if it's not plowed on the other side, nobody's going to use it. And it snows up there around mid-September.
This year it was particularly important because they appeared to close the border, more or less without warning, very early because of winterizing problems from the previous year. This year we didn't need it for another two or three weeks, so we lost two weeks or three weeks worth of tourism.
So some infrastructure development at the border crossing would help a great deal, so it isn't so weather-dependent.
Conservative
President, Vuntut Development Corporation, Air North
Only a comment, especially with regard to our neighbours in Alaska.
With regard to Air North, over the last seven years we've had to end our flights into Juneau. It used to be year-round—and it's not a moneymaker—in through Fairbanks, Alaska, and we provide a gateway to the Yukon through Fairbanks. We face ever-changing customs requirements, as well as flying requirements, for our aircraft that make it almost impossible--especially our turbo-prop planes--to meet their requirements.
If you fly from Old Crow on those days when we fly to Fairbanks, anybody on our planes has to clear customs, get back on the plane, then go to Dawson and clear Canada customs in Dawson, simply to get to Whitehorse. It makes it very unfeasible.
The second side is that there is some potential for the American government to require Nav Canada security screens in all airports where any airplanes may originate or fly into the U.S. That would require full security screening in Old Crow, Dawson City, and other locations. So it's not just the highway. It is a very difficult issue with regard to the changing requirements. Something that would be very useful for your committee and for the federal government is to continue to explore these issues, because it does close a gateway to the Yukon for tourism, but also for business travellers and other travellers.
Conservative
The Chair Conservative Bruce Stanton
Thank you, Mr. Duncan.
Now we'll go to Mr. Bagnell. He will be followed by Mr. Dreeshen and Monsieur Gaudet.
Liberal
Larry Bagnell Liberal Yukon, YT
Thank you, Mr. Chair. You're doing a fine job.
Thank you all for coming.
Just so the committee knows, on the rental cars—I've been working on this for years—it was partly reciprocal: the Americans couldn't do it either. But recently the Americans put in regulations so that Americans can do it across the border, so there's no reason Canada couldn't do that. I've written to the minister recently about that.
On Air North, Steve, I was interested in your comments about Air Canada funding. I wonder if—not now—you could give any information you have on funding they have to the clerk. I think it would help the committee if the clerk could then take that and elaborate on it for the committee on any funding that Air Canada has, because it would affect our recommendations.
On the point on the interline, I'm not sure if you're aware, but I wrote a fairly strong letter on the cost to Canada of Air Canada refusing to interline. I had someone from Air Canada—I don't think it was management, I'm not sure, an employee or someone—who wrote to me and said, “It's awful what these northern airlines do. They're putting in excess service and they're not charging the full fee, what it really costs, to undercut us in Air Canada, and we can't make it”, and everything. I almost fell off my chair. Is that not the exact opposite of what's happening?
President, Vuntut Development Corporation, Air North
Yes. Our fare structure, on the lowest end it's at $195, but we also have fuel surcharges and other Nav Canada fees and so on. What we also do on the upper side is we never raise our fares as high as, say, some of the other carriers. If you walk in and purchase a ticket, you may pay $1,000 for a one-way ticket. We set ours significantly lower than that because we know we'll be asked on the street how we can possibly charge $1,000 for a one-way ticket. So our fare structure is very different.
However, what we've noticed and what is absolutely the situation is that Jazz does charge significantly lower rates, and you can see those in the Northwest Territories, but even in the Yukon, at seat sale rates of $149. Then what they of course will do is max some of the other rates up to very high amounts. How they're able to do this is they increase capacity, so that there are additional conveniences for certain travellers. So they can flood a market with capacity, and they can also undercut the market. You can see the loads: there are planes with 20 people on them. But that's part of the business. That's what has happened.
Mr. Bagnell, you'll remember that when we launched our jet service, the day we announced our jet service in 2002, Air Canada flooded the market with capacity and lowered their rates to fares they had never charged before that. So there's definitely a predatory practice. We charge what we believe is fair and would stand up to any anti-competition tribunal. We charge a fair rate.
Air Canada gets a benefit because Jazz itself shows a profit because Jazz is paid for the capacity that it feeds into Air Canada. Whether their plane is full or not, they pay a certain rate. Air Canada, the main company, takes the hit on its books. So it doesn't matter if Jazz flies out with 20 people, they still receive well over $200 per segment from Air Canada per seat on those aircraft.
There are certain practices that are difficult to deal with. A good example of that is this year. It's a very difficult year, and we haven't seen or analyzed the financials, but I believe we're at about a break-even point for this year. Just we, WestJet, and I believe Southwest are the only airlines in North America that are at a break-even point. We don't charge too much, but we charge what we believe is the fair market rate. I can easily point out that we do fair comparisons all the time with regard to us and our competitors. There are at times very big price wars that take place.
Liberal
Larry Bagnell Liberal Yukon, YT
Thank you.
I only have a short time left, so I have two quick questions. One is for tourism; you can think about it while I ask my other one. What is your highest priority if we could only get one thing of the things you're talking about?
On museums, I just want to confirm, I think they've always been underfunded, but it sounds particularly dismal recently. I think someone said this morning that $315 million of the $340 million for museums in Canada go to national ones instead of the small ones, which really need it. The historic places initiative and CHPIF funding, the commercial heritage properties incentive fund, you're suggesting have been cancelled. The museums strategy promised four or five years ago has not come through, and the National Trust is also gone. Are all those funding cuts true?
Member, Board of Directors, Yukon Historical and Museums Association
As far as I know, yes. HPI is on the edge. CHPIF is being cancelled for one or two years. There have been significant funding cuts to MAP. Put them all together, and we're suffering quite a bit in the museum business.
Second Vice-Chair, Tourism Industry Association of the Yukon
There is a problem with land use certainty. It's just for investors to come here. Mr. Lévesque talked about having things to do when you're here, but people can't build anything here because of the land use certainty. Is it designated for mining? Is it tourism? I think the highest priority is getting that straightened out.
Conservative
The Chair Conservative Bruce Stanton
On this land certainty question, are we talking about lands that are the subject of land settlement issues, or are we talking about crown lands? I'm not sure if we've put our finger on where the uncertainty arises.
Second Vice-Chair, Tourism Industry Association of the Yukon
It's about with knowing what you can do in the areas. There are no set environmental or industrial areas.
Executive Director, Tourism Industry Association of the Yukon
We're going through a second land use planning process. We've completed and signed off on one in north Yukon. Public comment has passed, and now we're waiting for recommendations for the Peel area.
To give you an example of how this played out, there was quite a debate this past summer between the mining and tourism industries, as well as the environmental groups, in respect of how the recommendations will be given to government and what government will decide how the land will be used.
Conservative
The Chair Conservative Bruce Stanton
But it's predominantly the Government of Yukon that's guiding the land use process. That's what we wanted to be sure of.
Thank you.
Mr. Dreeshen.
Conservative
Earl Dreeshen Conservative Red Deer, AB
Thank you.
First of all, I want to talk to Mr. Mills. I want to congratulate Air North on what you accomplished by taking the Olympic torch throughout the north. We were all extremely proud of the northern carriers and the people who participated in the torch run. You put yourselves on the map—letting a lot of people from south of 60 degrees realize how much of the map is up there. I really appreciate that.
Could you give the committee an overview of the cargo and ground handling services that originate in the north? Is this part of your business seeing any growth?