Thank you, ladies and gentlemen. It's a pleasure to be here this afternoon.
Mr. Chair, honourable members of the committee, thank you for the invitation to appear before you to discuss matters relating to the transportation sector. My comments today address the aviation industry and its role within Canada.
First I would like to introduce myself to you and provide you with a brief background on the Air Canada Pilots Association as well. I've been a pilot with Air Canada for 20 years. I am currently a captain on the Boeing 767, based in Toronto, having also flown the Canadair Regional Jet and the Airbus 319, 320, and 321 family during my career with Air Canada. I had the pleasure of starting my term as president of ACPA as of January 1, 2015, so I'm the new kid on the block.
The Air Canada Pilots Association is the largest professional pilot group within Canada, representing over 3,000 pilots who fly Air Canada's mainline fleet and its subsidiary, Rouge. Our association aims not only to represent our members but also to be a true champion for all our Canadian aviation colleagues. In that spirit, we offer our thoughts on the larger issues your committee and the government must address.
As we all know, aviation is a highly competitive global business, subject to national and global cyclic economic swings. Canada itself has not been exempt from this volatility. As we are experiencing at the present time, the oil producing sector has suffered recently from the glut of oil in the global marketplace. Air Canada and its competitors rely on business generated by the oil sector to provide a source of revenue. With the reduction in a revenue source such as the oil sector, the economic hardship is felt by all. When such a sector suffers, there is a very real possibility that the trickle-down economic effect will almost feel as if the country has just caught a mild economic flu.
Air Canada is not immune from such cyclic economic events. On one hand, we do benefit from the reduction in the immediate price of the barrel of oil. Fuel is our single largest expense. Air Canada purchases fuel in U.S. dollars, which has had an unfavourable impact on our financial base due to the recent decline of the Canadian dollar.
The Air Canada pilots have played a significant role in ensuring the vitality and viability of our company. We recently signed a precedent-setting 10-year labour agreement with Air Canada. We recognized that this agreement would bring stability and security for Air Canada to ensure that our company would have a stronger presence in the domestic and international Canadian aviation sector.
We believe that a strong company such as ours is of benefit to our country and to our economy. We felt that an association such as ours showed that, as a vital part of our company, we take a more definitive, supportive, and engaging position. We are a professional workforce that is able to meet the challenges of a fair and equitable global competitive market force. We are also one of the safest and most highly respected airline operations in the world. The thousands of jobs created and supported by Air Canada, as well as the taxes paid through employee and company revenues, contribute to the viability of our country as a whole. A strong Air Canada and a strong aviation sector just makes plain, good economic sense for our great country.
I mention this to address two fronts that are concerning our association at this time. One is the continued attempt by Emirates Airline to expand its foothold into Canada. The Air Canada Pilots Association believes that if the federal government is concerned about its fiscal situation at present, it must also be concerned with its national interests at large. One of those interests is the sustainability of the Canadian aviation sector. With a population base close to 36 million, the domestic aviation market at present appears to be at its upper saturation limit.
In fact, during meetings with our company executives last year, it became quite clear to all that for Air Canada to grow as a company, we now have to look outside our country for growth opportunities.
This brings me to the government's blue sky policy. We applaud the government for taking such an initiative back in 2006. When applying the blue sky policy, it is essential to understand that Emirates Airline operates under a completely different business model and completely different rules.
Unlike Air Canada, Emirates Airline is an extension of Dubai's government, whose economic development strategy is to expand its airline market share at other countries' expense. Emirates Airline is a subsidiary of the Emirates Group of companies, which integrates the airline into its airport operations in Dubai. With near limitless state capital funding, a tax-free environment, foreign low-cost labour to build infrastructure, and a state-owned airline, Dubai has been transformed into a major collection point, commonly called a hub.
The Canadian government does not extend to Canadian airlines the same support and benefits as the Dubai government does to Emirates Airline. Canadian airlines have to fund their own capital expenditures at market rates, and our airports are operated by independent, local authorities.
We are not asking the Canadian government to provide us with these same advantages. We simply don't think our government should reward foreign airlines, operated by their governments, that do business that way. We need to make sure that our bilateral agreements support a safe, secure, efficient, economically healthy, and viable Canadian air transportation industry.
The government resisted intense pressure to greatly increase access to the Canadian market five years ago. It was decided that Gulf carriers should have landing rights commensurate with their market size. ACPA worked closely with Air Canada to bolster this position. We believe that current access levels remain appropriate.
Another point of concern we consider to be emerging on the horizon is another business model, the stateless “flag of convenience” airlines such as Norwegian Air International. The parent company, Norwegian Air Shuttle, is based in Norway and has set up a holding company in Ireland. It has received an Irish air operating certificate. It appears that Norwegian Air International will not be operating any transportation services out of Ireland, so who will provide the regulatory oversight of NAI's operations if they do not operate out of Ireland?
Here in Canada, all regulatory oversight is provided by Transport Canada, which ensures that all Canadian air carriers adhere to the Canadian air regulations. If we are to comply with the full intent of the blue sky policy, then this is an issue that must be fully addressed. If the regulatory oversight issue is not addressed, how can the blue sky policy live up to its terms, which state, “Air liberalization initiatives will continue to be guided by safety and security considerations”?
NAI does not use Norwegian or Irish flight crews but rather Thailand-based crews who are hired through a Singapore employment agency and who work under Singapore labour law. If NAI recruits their employees through third-party employment agencies based in Thailand and Singapore, and then hires them through offshore holding companies established strictly to circumnavigate Irish and Norwegian labour and tax laws, would that be considered allowing the market forces to determine the price and quality of air service options? The question that needs to be asked here is: under what labour laws and rules will these employees have to work?
Here in Canada all Canadian aviation operators abide by the rules established by Canadian labour laws. If companies circumnavigate the Irish and Norwegian domestic labour laws to avoid having to abide by them, how can Canadian carriers compete on a level playing field?
Any company afforded the rights to fly to Canada under our negotiated bilateral blue sky policy should be required to adhere to the same principles. If the company is based in Norway or Ireland, it should abide by that jurisdiction's labour laws.
In closing I would like to remark on one more item of interest. Transport Canada, with the support—