Evidence of meeting #43 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site.) The winning word was carriers.
A recording is available from Parliament.
3:50 p.m.
Conservative
Parm Gill Conservative Brampton—Springdale, ON
Does the airline have the authority to confer its rights onto another carrier?
3:50 p.m.
Chief Air Negotiator, Director General of Intellectual Property and Services Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
No, not in our transport agreements. It depends on the agreements, but we normally would identify the national carriers in the specific air agreement that we negotiate.
Marc may want to add something.
3:50 p.m.
Executive Director, Air Policy, International, Department of Transport
Under the Canada Transportation Act the Minister of Transport has to designate a Canadian carrier to operate internationally under a specific agreement. The first step the carrier has to take is to come to us and request it be designated to operate, let's say, under the Canada-China air agreement. Once it has this, it can start to operate, to use the rights that are available under the agreement.
The agreements that we negotiate put in place a legal framework. That's as far as our work goes. After that, it's up to the carriers to decide what they want to do with those rights. That's why we say the decision on launching air services depends on commercial considerations on the part of the carriers. It's not the government that will tell a carrier to fly between point A and point B.
3:50 p.m.
Conservative
Parm Gill Conservative Brampton—Springdale, ON
You also mentioned in your remarks that for the first time this year, Canadian officials consulted key business organizations, namely the Canadian Council of Chief Executives, Canadian Manufacturers and Exporters, the Canadian Chamber of Commerce, and so on.
I'm just wondering; before this year, who were some of the stakeholders consulted?
3:50 p.m.
Chief Air Negotiator, Director General of Intellectual Property and Services Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Typically, on an annual basis, prior to setting a negotiating plan for the year, we would negotiate with our national carriers. We would negotiate with our airports. We would negotiate with our provinces and territories, and with our tourism commissions federally and provincially. We would negotiate with most of our key stakeholders in the air transportation sector.
Am I missing anyone, or...?
3:50 p.m.
Executive Director, Air Policy, International, Department of Transport
We don't negotiate; we consult.
3:50 p.m.
Chief Air Negotiator, Director General of Intellectual Property and Services Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Yes, consulting.... We'd be consulting with them for their input.
This year Minister Fast requested that we broaden our consultation stakeholder base to include the key business associations, which we have done this year. We will continue to do that in subsequent years when we're doing our annual consultations.
3:50 p.m.
Conservative
Parm Gill Conservative Brampton—Springdale, ON
You also mentioned that double taxation is a primary issue covered by ATAs. Can you speak to the process of eliminating this practice and how that's negotiated benefits to Canadian business by doing away with double taxation?
3:50 p.m.
Chief Air Negotiator, Director General of Intellectual Property and Services Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
Basically it's a clause in an air transport agreement, the model that Canada uses, that stipulates that our airlines should not be paying tax in more than one municipality. It's a similar clause to what we would use in any of our trade agreements.
Therefore, for our domestic carrier, whichever airline is flying those routes, if they are paying tax in one jurisdiction, either Canada or the other, the article ensures that they will not be paying taxation in both jurisdictions. It avoids double taxation. With some of our partners, they would use an agreement like this as an opportunity to collect tax revenue when it is already being paid. It ensure that airlines pay in only one jurisdiction.
3:50 p.m.
Conservative
Parm Gill Conservative Brampton—Springdale, ON
Perfect.
You also mentioned that the implementation of the blue sky policy requires interdepartmental coordination between Transport Canada, the Canadian Transportation Agency, and Foreign Affairs, Trade and Development Canada. Can you explain the role and decision-making of each department in regard to the air transport agreements?
3:55 p.m.
Chief Air Negotiator, Director General of Intellectual Property and Services Trade Policy Bureau, Department of Foreign Affairs, Trade and Development
In my situation as the chief air negotiator, I report to the deputy minister of international trade in my department, but I also report directly to the deputy minister of Transport Canada. In that respect I have two bosses to whom I report simultaneously. Marc has his own management structure that he can speak to, but Transport Canada officials from the Transport Canada air policy secretariat and my branch work together on an ongoing basis to develop our plans and activities. We work independently, although Transport Canada has the overall lead on air policy for the Government of Canada.
3:55 p.m.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
I want to start off by thanking you both for your testimony. I'd also like to say that I'm pretty new to this file and have been meeting with a lot of stakeholders. They have been uniform in their praise of the skill of Canadian trade negotiators, so thank you very much for that. It's great to hear.
I want to start with a couple of really specific questions; I apologize in advance for my ignorance. On the blue sky policy website, I was able to find the figures for the increased outbound international traffic between 2006 and 2011. It has gone up by 50%. I couldn't find the figure for the inbound international traffic. Is it just the same, and that's why you didn't put it there, or am I missing something? Is there any meaningful difference?
3:55 p.m.
Executive Director, Air Policy, International, Department of Transport
Are you referring to the increase in terms of the partners we have?
3:55 p.m.
Liberal
3:55 p.m.
Executive Director, Air Policy, International, Department of Transport
In terms of the traffic that I mentioned, the 47-million one-way trips per year, that includes both inbound and outbound.
3:55 p.m.
Executive Director, Air Policy, International, Department of Transport
More or less.
Usually somebody who goes on a trip somewhere will come back to their point of origin, but not always. There are students who come here for several years, people who move to another country, and so on, so roughly speaking you could divide it by two. But the number of 40-million one-way trips that we use includes both outbound and inbound traffic.
3:55 p.m.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
Thank you.
I am also wondering how much of a sense you have of the implications of the stepped-up level of agreements on traffic regionally. In particular, I'm the MP for Toronto Centre, and we have a regional airport that is the subject of quite a lot of controversy, as I'm sure you're aware. I'd be interested in any information you could share about that.
Where are people going, and has there been more of an increase in some airports and regions than others?
3:55 p.m.
Executive Director, Air Policy, International, Department of Transport
We've seen benefits from our agreements throughout the country. Most big airports have received new services since the policy has been in effect. The top eight airports in Canada represent about 97% of the international traffic. Beyond those top eight airports, it's maybe not as much, but that's because with the market being what it is, carriers usually go to the bigger centres.
That doesn't mean, though, that there are no benefits for secondary cities or more remote communities because often the connectivity will increase. Somebody who lives in a secondary city going through one of our major hubs will have more choice in terms of destination, even though there may not be a direct flight between the foreign country and that particular community.
3:55 p.m.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
Thank you.
Mr. Davies raised the issue of cabotage. I would be interested in a sort of blue-sky thinking approach on what your views are, as people who have been working in this area for a long time.
What should we be thinking in the longer term in terms of cabotage that would be beneficial for Canadian consumers, Canadian airlines, people who work for Canadian airlines?
3:55 p.m.
Executive Director, Air Policy, International, Department of Transport
To define what you mean by “cabotage”, it is the carriage of a passenger by a foreign airline between two points in Canada.
4 p.m.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
Or vice versa, right? There could be cabotage in the U.S. that would be open to Canadian airlines, for example.
4 p.m.
Executive Director, Air Policy, International, Department of Transport
Right, exactly.
Very few countries in the world allow for cabotage. The U.S. does not allow for cabotage. We have looked at possibly creating a common North American aviation area in the future like they have in Europe, but there's no interest south of the border to go down that road. It's not something that's very common around the world.
With regard to the blue sky policy, when you read it, there's a clear definition of what we mean by an open skies agreement. Various countries have various definitions, so we felt it was important to define what we mean in Canada by an open skies agreement. By the same token, the policy also explicitly states that cabotage will not be included in our agreements, and that's the policy stance of the government so far.
4 p.m.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
On a quick 10-second follow-up, when was it that you explored with the U.S. negotiator the possibility of this and they said, “no way”?
