Bonjour. Good morning, everyone.
Thank you, Mr. Chair, for the introduction.
Transport Canada's primary mandate is to have a transportation system in Canada that is recognized worldwide as safe and secure, efficient, and environmentally responsible. Transport Canada is committed to putting forward and implementing legislation, regulations, standards, and policies to this end. These efforts are intended to contribute to a strong and competitive Canadian economy. In this regard, I would like to focus on Transport Canada's mandate as regard the aviation sector and its responsibilities under the Air Canada Public Participation Act, or ACPPA.
During my appearance here today, I would like to provide some additional information about the context in which we conduct our policy analysis for the aviation sector in Canada.
I think we can all agree that a healthy Canadian economy is strongly connected to a well-functioning transportation sector. Transportation provides mobility for people and facilitates the delivery of goods to markets at home and abroad.
In Canada, the air transportation sector is focused on the high-speed transport of passengers and high-value, time-sensitive goods over long distances. There are about 770 Canadian air carriers that operate domestic and international air services, as well as 245 Canadian private operators.
In the 1990s, Canada implemented a user-pay policy, guided by market forces, concerning the use and development of air services and infrastructures. The government considered this system the best way to allow airlines and airports to adapt, innovate, stay competitive, and serve the public in the most efficient and profitable way possible.
As a result, Canadian airlines, airports, and their navigation service provider, Nav Canada, function according to business principles and must recover operating and capital costs from users through various fees and charges to remain economically viable.
The operating context in which airlines conduct their activities involves considerable costs related to safety and security in the air and on the ground. The democratization of the airline industry has made our aviation system more complex, owing to the increasing number of passengers and the number of aircraft in the skies.
On the whole, airlines have seen their profits drop—their profits per passenger kilometre—as a result of constant competition and consumer pressure to offer ever lower fares. As a result, the current trend in the aviation sector is that airline companies are looking for new sources of revenue from passengers in order to remain economically viable. According to the 2016 annual report of the International Air Transport Association, or IATA, airlines' profit margins range from chronic operating deficits to limited profit margins, from 1% to 8% in the best years.
Air Canada is the largest airline and the largest provider of scheduled passenger services to and from Canada. Together with Jazz and other regional airlines operating flights on its behalf, Air Canada operates approximately 1,579 scheduled flights per day to 193 direct destinations on five continents, transporting approximately 41 million passengers annually. Air Canada also employs more than 30,000 employees nationwide, and its headquarters are located in Montreal.
Air Canada is a former crown corporation, originally founded in 1936 under the name “Trans-Canada Air Lines” and then renamed “Air Canada” in 1965. Air Canada was privatized in 1988 pursuant to the ACPPA. At the time, the government opted to maintain certain obligations on Air Canada, including the location of its headquarters, where the carrier's aircraft maintenance work is done, and some provisions regarding its statutes and articles of continuance, to name just a few. The ACPPA is administered by the Minister of Transport.
Section 10 of the ACPPA prescribes that Air Canada is subject to the Official Languages Act, or the OLA, and is therefore considered a federal institution pursuant to the OLA. Air Canada is the only Canadian airline that is subject to obligations under the OLA. It has been subject to the OLA since 1969, including part IV, covering the communications with and services to the public; part V, covering the language of work; part VI, covering the participation of English-speaking and French-speaking Canadians; and part VII, covering the advancement of English and French.
Other major Canadian airlines, such as WestJet, Air Transat, Porter Airlines, and Sunwing, are not subject to the same obligations as Air Canada under the ACPPA or the OLA. However, all major airlines must provide safety instructions to their passengers in English and in French under the Canadian Aviation Regulations pursuant to the Aeronautics Act, which also falls under the responsibility of the Minister of Transport.
It should be noted that Air Canada does not receive any direct or indirect funding from the federal government for its linguistic training programs, the language assessments of its employees, or its bilingual communications activities. Nevertheless, the airline allocates significant resources, both financial and human, to develop and maintain its linguistic programs and internal tools to meet its obligations under the OLA.
As Air Canada explained during some of your committee's deliberations, the challenges they face where their linguistic obligations are concerned relate to the availability of bilingual candidates from a recruitment perspective and the dispatch of bilingual personnel in a constantly evolving operational environment.
Last March, Air Canada presented to you a number of measures it had implemented, and described the partnerships it has forged in all communities across the country as regards its linguistic obligations. Despite the difficulties that Air Canada faces with regard to communications and services in French, we can agree that Air Canada has made real efforts in respect of its commitment to the official languages.
I also want to highlight the work that's being done to support the minister's commitment to enhancing the traveller experience as one element of his transportation 2030 strategy. The department and the minister undertook extensive consultations over an 18-month period as part of the Canada Transportation Act review process. We heard from more than 300 Canadian transportation and trade stakeholders, including the provinces and territories, about how to ensure that the national transportation system continues to support Canada's international competitiveness, trade, and prosperity.
We also heard from individual Canadians, in communities large and small, all across the country regarding their concerns about our transportation system. Canadians expressed their disappointment with the experience they faced during their air travel. The minister has committed to improving that experience.
To support this commitment, the minister recently introduced Bill C-49, the Transportation Modernization Act, which is the first step in improving the travelling public's experience. It includes among other things new measures regarding the rights of air travellers, the liberalization of international ownership restrictions, as well as a transparent and simplified approach for approval of Canadian airline joint ventures.
Not only would the changes being proposed encourage more competition and enable better growth; they are also designed to provide Canadians with better service that improves the traveller experience.
I started my comments by talking about the mandate of Transport Canada. I want to be clear that Transport Canada expects all federal institutions under its responsibility to ensure that their official languages obligations, as outlined in the OLA, are met. This expectation also applies to Air Canada. We believe that Air Canada continues to make progress in fulfilling this goal.
Transport Canada, in partnership with colleagues in Heritage Canada, the Treasury Board Secretariat, and the Department of Justice, has been watching closely the discussions of this committee and its review of some of the complex issues being brought before it. We look forward to receiving your advice on these important issues.
I would be happy to answer questions the members of this committee may have.