Industry Committee on March 11th, 2021

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

With that, we will now start our rounds of questions. Again, if you keep an eye on the screen, when you see the cards, you'll know where you are on timing.

Our first round of questions goes to MP Dreeshen.

You have the floor for six minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Madam Chair.

There are a couple of thoughts that I've had. I'd like to speak to the folks at WestJet.

We do still travel some around this country and of course we use WestJet. I must say that when we go into our airports and when we're on your planes, we feel safe. That's an important aspect.

I really want to emphasize the Alberta pilot project for arrivals. This was something that was very critical and of course it got short-circuited with the announcement that there were going to be these quarantine hotels and that sort of thing. You had mentioned that perhaps the Prime Minister was looking at new initiatives but, quite frankly, that whole policy has caused some great consternation.

I'm wondering if you can tell the committee what the impact was. I know, earlier on, when the announcement was made that anybody outside of the country had to get a test 72 hours before they departed. They didn't know what test it was, and your people were expected to be the policemen in these other countries, and when they would arrive in Canada, if it wasn't the right test, there were serious concerns.

Could you talk about the impact? I know that there are laid-off staff and slashed routes because of these issues. What has been the impact? What do you see as a way forward? Of course, your industry has not been one that has caused a lot of issues.

[Andy Gibbons]

Thanks for that and thanks for flying with us. I really appreciate it.

Look, Mr. Dreeshen, through you, Madam Chair, just quickly on impacts, prior to COVID we had over 14,000 active WestJetters and today we're just shy of 5,000. It has been absolutely nothing short of devastating for our people, and if you know our people, you know it's not just a job for them. They love our company and love what they do.

I won't get into the fleet statistics. You know how much we're down. I would rather focus, as you said, on the path forward. We understand the hotel policy to be a travel deterrent and job well done. It has deterred travel. It was specifically designed to do so, but while we are deterring travel and while we are taking extreme measures to curb variants and other things, now is the time to properly plan, to properly plan for the summer, to properly prioritize domestic travel and to replace the hotel policy, which is a deterrent, with something like the Calgary pilot that balances all of these objectives.

It was Dr. Hinshaw herself who talked about how the Calgary pilot was one of the reasons they were able to catch the variant and curb the spread of the variant. We can use testing as a tool instead of blunt instruments like hotels, and we're hoping to transition. I just want to flag for you that we did agree with the government to pull down our sun flying. That was not a happy day in our company but we did agree to do so.

The Prime Minister did come out and make two commitments. He committed to the safe restart of the travel and tourism sector, and he committed to reviewing the relationship between testing and quarantine. So we're hopeful. We appreciate those words and now we really are focusing on that plan and what Canada's restart plan will be.

Finally, for your interest, I would look at the United Kingdom. The United Kingdom put out a restart plan for their country and it included aviation and travel and tourism, and they set a very clear date. They said that on May 17 they intend to open. I think setting dates and goals and ambition is important. It doesn't mean you care less about COVID. What it does mean is that you recognize the critical nature of this work and our employees, and let's be clear: a restart is what's going to get our people back to work.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

My next question is for Telesat.

We had a great discussion previously on rural and remote broadband and the issues that exist there. Of course, it's great news about the set-up as far as LEO satellites are concerned, the Lightspeed program. Again, this type of technology where we're allowed to use the intellectual and manufacturing skills that we have is so important.

I think one of the other things that you mentioned was the concern about spectrum and how we fear being non-competitive with some of these other countries. When we're in such a global region, it makes our competitiveness such that we could be in bad shape. I'm wondering what we could be doing as far as research and development is concerned. How can we deal with the spectrum issue?

[Daniel Goldberg]

The implicit recognition in the question is that we're operating in a global industry. We don't have the ability to have one set of rules that only applies in Canada and then the rest of the game is played very differently outside of Canada. I would say two things.

On the spectrum file, we really need to see our government here in Canada follow the direction that's been taken just south of the border in clearing exactly the same spectrum. If our competitors clear the spectrum and receive $16 billion and we clear the same spectrum and aren't compensated, there's no way Telesat is going to be able to compete.

Then, beyond that, I would say that on the research front—

[The Chair, Liberal, Sherry Romanado]

I'm sorry, Mr. Goldberg. I don't want to cut you off—

[Daniel Goldberg]

Okay, I'll stop.

[The Chair, Liberal, Sherry Romanado]

—but we're over time.

[Daniel Goldberg]

Thank you for the questions.

[The Chair, Liberal, Sherry Romanado]

Our next round of questions goes to MP Ehsassi.

You have six minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Thank you to all of the witnesses who have appeared before our committee this morning.

I will start off with Mr. Dias.

Mr. Dias, as you know full well, part of the reason that our aerospace industry has done as well as it has in the past is our workforce. We certainly have one of the best workforces in the world. As we look to the future, what would you emphasize as being important to ensure that we continue to have the best workforce in the world?

[Jerry Dias]

If you look at the history of the aerospace sector in Canada, Canadians have always been at the leading edge of technology as it relates to manufacturing not just commercial aircraft but space and military aircraft. At one time, we were number four in the world in manufacturing. Today, we are about number 12. That's as a result of a variety of reasons.

Number one, the way we will continue to lead in this incredible segment is through research and development, by developing the skills in order to create the proper engineering jobs, in order to create the environment that deals with the latest in changing technology. We know that the aerospace industry is at the top of the food chain as it relates to technological advancement.

It's about research and development. It's about an overall commitment of the government through procurement to keep people employed. The problem with the aerospace industry today is the airline industry. People aren't buying planes. I'm spending a lot of time talking to Air Canada. Obviously, WestJet is participating here today. People aren't going to buy planes if we're not moving customers around the world. That's why we're going to have to find some solutions for rapid testing and digital travel wallets. There's going to have to be a whole host of initiatives in order to get people back to work.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that, Mr. Dias.

[Jerry Dias]

Thank you.

[Ali Ehsassi, Liberal, Willowdale, ON]

You touched on R and D.

I will turn now to Mr. Balducchi.

One of the realities is that, if you look at Statistics Canada research, it's quite obvious that even prior to COVID, in the several years leading up to it, there was a precipitous decline in R and D in the aerospace sector. What do you attribute that to?

[Philippe Balducchi]

I assume you are referring to the decreased R and D in Canada.

[Ali Ehsassi, Liberal, Willowdale, ON]

Yes, that's right.

[Philippe Balducchi]

First, you have to realize that, in terms of the R and D spend overall in the aerospace activities, at least for commercial aircraft, it's actually been the opposite. There's been quite an acceleration of R and D with new development programs. I would say that the two main contributors are Boeing and Airbus, with the development of the 787 on one hand, the A350 on the other hand, and then the MAX in the news and so on.

It's difficult for me, coming from Europe, and I apologize because, you know, my hometown is Toulouse, where there is a lot of interest in aeronautic activity, not only in commercial aerospace, but also in space, Mr. Goldberg. Aerospace is almost like a sacred cow. Everyone strives for aerospace. Every student dreams of working there.

[Ali Ehsassi, Liberal, Willowdale, ON]

Yes, Mr. Balducchi, I couldn't agree with you more. It is a very significant sector. However, as we look to the future, how can our government ensure there is more in-house investment in research and development as well?

[Philippe Balducchi]

I think there are several things.

First, we need to somehow rehabilitate the aerospace sector in front of the students, the general public, and to remind them it is a high-tech industry. It's not only a low-tech industry. There is a lot of hype about digital. You find a lot of digital activities in the airplane, and I think we need to pass that message around that it is not a 20th century activity, that it is a 21st century activity.

Then you need to support some existing projects. I'll take the example of the A220, if I may. Today, the A220 is the cleanest aircraft. It is clearly a green aircraft. There are a lot of questions about looking for the next generation, for hydrogen, electric, and that's right. We need that, and Canada should definitely support this very long-term initiative.

You also note support of the existing platforms in the short term, the ongoing existing developments we are investing in, which by the way are difficult, given the specific situation. Some projects had to be delayed, but those developments are supporting green aircraft today, and this needs to be pushed.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Mr. Goldberg, in looking at the sector overall in the years preceding COVID, there was a precipitous decline in R and D. What would your recommendations be to ensure more R and D on behalf of companies?

[Daniel Goldberg]

At least in the commercial space sector, there hasn't been a precipitous decline in R and D. We've been investing massively. I'll also be honest with you. It's not because we like investing in R and D, because we have a bunch of engineers who like doing R and D, and we do. It's because our environment is so brutally competitive that if we're not investing, if we're not innovating, we're out of business. So we've been pouring money into R and D because it's existential.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Mr. Savard-Tremblay, it is your turn. You have six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Madam Chair.

Good morning to the witnesses and my fellow members.

I'd like to start with a question for Mr. Brouillard.

I think we need to recognize that aerospace is a strategic industry, so we should embrace that culture and look at things differently. It's not a simple market. Ontario recognizes that its auto industry is strategic and consistently consults industry stakeholders. There is a standing consultation mechanism.

I would think, Mr. Brouillard, that, given your involvement with Airbus and the others, you are in regular contact with the Canadian government.