Industry Committee on March 11th, 2021

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Madam Chair.

Thank you to the witnesses.

Mr. Gibbons, I just saw that you cancelled an order with Mr. Balducchi for 15 Boeing 737 Max aircraft. Unfortunately, the COVID-19 pandemic is hitting aircraft manufacturers extremely hard.

Mr. Balducchi, you talked about sending a signal earlier. On Tuesday, we heard from Aéro Montréal's president and chief executive officer; she said that Canada had turned its back on the aerospace industry over the past five years, especially this past year, with its decision not to give the industry any direct support apart from the programs that were available to everyone.

With companies like WestJet being forced to cancel their airplane orders, do you foresee repercussions in the long term? We are talking about the future. Obviously, we can't spend time dwelling on the past, but what has happened in recent years is an important predictor of the future.

What strategic measures should the Canadian government put in place to help the industry?

[Philippe Balducchi]

I think the signal the government is sending is a very dangerous one, with potentially long-term consequences for Canada. As I said, the aerospace sector, especially on the commercial side, is a global industry, so when large orders come in, they trigger a global supply chain. Contract givers prefer to deal with places that support the aerospace sector and see its strategic importance. However, that isn't the message being sent to the aerospace sector today.

Canada is practically the only country in the world that could have a thriving aerospace industry but is choosing not to support it. Actions speak louder than words, and it's high time for action. The solutions exist. What should the government do? Provide immediate assistance to the most vulnerable members of the industry, because there are vulnerable members. The plans are out there; Ms. Benoît probably talked about that. We know what is needed: support for the airlines. We've said it before. We have to get them flying again, and the demand will follow. Investment in innovation is also needed. When I say innovation—to follow up on a question I was asked earlier—I am referring both to the very long term and to existing products. We can't focus solely on 2035 or 2050. To get there, we have to go through the 2020s. Action is needed on all of those fronts.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

Mr. Goldberg, I have a question for you. About two weeks ago, La Presse published an excellent article about managing space traffic. It was written by Stewart Bain, of NorthStar Earth & Space Inc., a Montreal-based company. Basically, the idea is that we can send all the satellites into space we want, but eventually, someone is going to have to manage the traffic created by existing and future satellites orbiting the earth. Obviously, I'm not talking about putting in traffic lights and stop signs. In addition to your satellites, Elon Musk has his network of Starlink satellites and Google intends to launch its own satellites. Did you see the article, and if so, what were your thoughts?

[Daniel Goldberg]

I did see the article. I know Mr. Bain. We've had good co-operation with his company, NorthStar, over the last little while.

It's a big concern. Telesat's been a satellite operator for more than 50 years. We're one of the oldest, most experienced satellite operators out there. Using space responsibly is essential. It's not just good for humanity; it's good for our business. If you do things in space that are reckless and stupid, we're not going to be able to operate.

We are concerned about these new entrants that are coming, that are launching thousands of satellites. We're taking a very different approach. We're making sure all of our [Technical difficulty—Editor].

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

What can the federal government do in terms of further investments to help you?

You brought up spectrum and the CRTC.

What must the government do immediately to help your industry?

[Daniel Goldberg]

Madam Chair, am I allowed a quick response?

[The Chair, Liberal, Sherry Romanado]

You're out of time, but you may give a quick response.

[Daniel Goldberg]

We need the right outcome on that spectrum file. That's absolutely essential.

Beyond that, the Government of Canada has a long history in space as one of the early space-faring nations. It needs to work well with the other space-faring nations to develop responsible rules of the road that we've always followed and that we need these newer entrants to follow as well.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Erskine-Smith.

You have the floor for five minutes.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much, Madam Chair.

I want to start with Mr. Gibbons.

I agree, by the way, that the travel rules ought to be altered and that we should have a much stronger focus on testing. I think that would be better for everyone.

When we look at the potential federal support, we've seen the federal government commit to supporting the airline sector. When you look at the crisis in 2009, the Conservative government of the day supported the auto industry and took equity. When you look at what Germany has done with Lufthansa, it's a significant bailout, but again, they're taking a government stake.

Is this something that the federal government ought to consider and if not, why not?

[Andy Gibbons]

I'm not sure I follow your question precisely.

It's up to the federal government to determine what they think is in the public interest. It's up to us to determine what's in the interests of our employees and the communities that rely on our investments.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's an absolutely fair answer. You think it's fair, then, that it's on the table.

I guess I put the same question to Mr. Dias—

[Andy Gibbons]

Is it on the table?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Do you think it's fair that it be on the table as a matter of negotiation?

[Andy Gibbons]

It's not up to me to determine what the government thinks should be fair and on the table.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

That's fair enough.

Mr. Dias, you've commented previously with respect to the auto bailout that maybe Canada got rid of its shares too quickly and should have maintained those shares. In the case of the airline sector, you haven't been so forceful to say that there should be an equity stake. I'm curious to know why.

[Kaylie Tiessen, National Representative, Research Department, Unifor]

I think Jerry had to step out, but I can answer that.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Yes, sure.

[Kaylie Tiessen]

I'm Kaylie Tiessen. I work in the research department at Unifor, supporting the sector.

We have been vocal on this issue for nearly a year now, including talking about the need for any support to flow to workers. It has to be focused on healthy social outcomes that ensure good jobs are continued. We want to make sure that any negotiations do not require or end up making us have to take concessions in order to save companies. That can't fall on the backs of workers. We need to focus on sustainability in the recovery. Government can play a strong role in making sure that happens.

Thanks.

[Andy Gibbons]

Mr. Erskine-Smith, can I make an additional point? Do you mind?

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Sure. That's no problem.

[Andy Gibbons]

On that issue there has been a lot of discussion about the parallel with 2009. I think it's really important to note that the situation our company is in is nothing like 2009 and automobile manufacturers.

In 2009, the government never prevented Ford or Chrysler or any other company from selling its automobiles. That is the case with our company today. It's a very important distinction.

WestJet is not a failing company. We're not in this situation because of a bad strategy, bad labour relations or any other historic issue that's tied to government support. We are in a very different set of circumstances.

Our CEO did send a letter on December 10 to all members of Parliament and senators that talked about our priorities.

I would just encourage you.... I can't talk about our negotiations, but—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I appreciate that. It's fair to draw the difference between—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Yes, although certainly Germany is experiencing the same crisis we're experiencing here in Canada and they took a 20% equity stake. It seems to me it should be on the table in a serious way.

Mr. Gibbons, what do you think about what France and the Dutch government have done? They say they're going to be there to support their airline sector, but they're committed to a sustainable recovery, as Ms. Tiessen just said. They're going to drive emission reductions and they want commitments from the airline sector to drive emission reductions as they bail them out.

[Andy Gibbons]

It's not the same—