Public Accounts Committee on Oct. 3rd, 2017

[Michael Keenan]

There are a number of questions, and I'll try to work through them in turn.

On the matter of safety versus efficiency, there are two things. They are separate, and they are both important.

I would say that the operating principle of Transport Canada is that safety is more important. There's a certain hard line that we draw on safety, and we work very hard to ensure that it is met. With regard to the example in which the member was talking about coming into a remote airport in bad weather, the basics are there to ensure that the plane can land safely.

Safety and capacity are intertwined. The example of coming into a remote airport where there is poor visibility or bad weather is a great example. Depending on the level of infrastructure at the aerodrome—the quality of the landing lights, the navigational aids, and the weather system....The Auditor General points out very well in paragraph 6.28 that with regard to laying out these hard elements in aerodromes, the more of those things that are in place in any given aerodrome, the broader the range of weather conditions in which a plane can safely land. Safety and efficiency are intertwined to an important degree.

That's the first point.

The very important question that the member asked about how we are going to track whether we're living up to the aspirations and commitments that we're making in response to the Auditor General's report is a key question. The key to that will be tracking the results in terms of the actual infrastructure investments that are made in remote and northern areas as a result of the new investments that the Government of Canada has committed to address these challenges. These investments would include, in particular, the national trade corridors fund, for which the first round of applications are out. Next year we're committing that the second round of that program will have a particular focus on northern transportation infrastructure. Now that program is targeted on all transportation infrastructure. There is a challenge with marine infrastructure in the north, as well as with air infrastructure. The key is tracking the results of the implementation of that program in terms of the actual building of infrastructure that addresses the challenges identified by the Auditor General's report. Reporting on that as we go forward will be important.

I would also mention that it will be important for us to track and report on how other sources of funds and activities contribute. For example, as part of the Building Canada fund, the government has committed $2 billion over 10 years for remote and northern communities. That, again, is an additional source of funds that is accessible to help communities meet their needs, including their transportation needs. I think it's a question of tracking the results to ensure that the commitments we're making today turn into actions through these new programs in the coming months.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Keenan.

We'll now move on to the next member.

Ms. Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

Thank you very much to the Auditor General and witnesses for being here this morning.

The report we're studying this morning, for me, is really the essence of what we're doing here at the public accounts committee. My colleagues have referred to that already. Our first order of business is actually not so much the money, although we'll get to that, but the issue of public security and safety and how well our public services are meeting those requirements for Canadians. Of course, this is exactly where we are this morning, addressing that issue.

That was really my first concern, but once in a while the money actually does matter.

I noted, Mr. Ferguson—we have spoken before—that it's highly unusual for the Auditor General to point out when there is a lack of funding, and you do it in a very tactful way. I look at the quote, “In 2016, Transport Canada asked all 200 airports eligible for program funding to identify their safety-related projects over the next three years,” and look at the numbers, “Of the 105 eligible remote northern airports, 41 responded with an estimated total of $101 million for safety-related projects, including the rehabilitation of runways and lighting systems." Then you go on to say that the OAG, “found that the available funding would not be sufficient to meet the needs identified by remote northern airports, as the demand significantly exceeds the program’s annual funding of $38 million.” There it is spelled out for us.

I always look at the time period of the audit as well. I think that's important. Here in public accounts, we're looking at what has already happened and where we can learn some lessons. We know this is for the period from 2013 to 2016. There have been some changes since then, but I still want to focus on that period. It's not to lay blame anywhere but to try to pick up where the lessons are. I think there's something in there. How could these safety-related projects go undetected?

I would like to ask the Auditor General to give his view on the role of the owner-operators, because his office would have conducted interviews. I'd like him to give us some feedback on what they were saying. Then I'd like to have a comment from Transport Canada.

[The Chair, Conservative, Kevin Sorenson]

Mr. Ferguson.

[Michael Ferguson]

Thank you, Mr. Chair.

In terms of the owner-operator, I think we laid out—for example, in paragraph 6.54—that we talked to the operators about applying to the airports assistance program for funding and some of the issues they were running into. Not all of them actually came forward and applied to the program. Part of the problem was the cost of submitting a proposal, or their capacity or ability to get contractors to prepare and submit a proposal. Some operators, right from the very beginning, were running into some problems with being able to bring their concerns forward.

The issue we are identifying here is that when you look at the funding, particularly through the airports assistance program, that has been available compared to what the owner-operators are saying is on their list of safety-related issues, those two things don't line up. Somehow, those two things need to line up.

I would also like to comment on the whole safety issue, which I think has been touched on so far, because in no way are we questioning the safety of these airports when they're operating. They're all regulated and they all have to follow the rules. The concern is more, as the deputy put it, that there's perhaps a range of weather conditions, for example, that some of them can't operate in. The airport is safe when it's not operating, but that means things like medical evacuations can't get in within those time periods, so people who may need those medical evacuations at that time don't have access to them. The issue isn't a question of the airport not operating safely. The safety issue, if you want, is a broader issue of people who perhaps need some emergency types of services, but because of weather conditions and because the airports aren't equipped to operate in those weather conditions, those people may not be able to get access to the services at those times.

In terms of the overall issue, it very much is—and I think this was referred to earlier—one of planning and funding. It's a question of what needs to be done, where it needs to be done, who has to do it, what money is available, and whether those two things line up. If they don't and there's a gap, then what happens? If these are safety issues, if they are issues of being able to operate in a broader range of weather conditions, is one goal to allow some of these airports to operate in those weather conditions? Again, we're not questioning the safe operation of the airports when they are actually allowed to operate.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Mr. Ferguson.

I still have some time.

Mr. Keenan, could you please comment, especially on the paragraph the Auditor General referred to, paragraph 6.54? How has your department addressed those obstacles to owner-operators actually applying for funding?

[Michael Keenan]

I'm happy to do that. I would just like to reiterate that the way the Auditor General clearly framed this is exactly the way we see the challenge in terms of this infrastructure.

With regard to paragraph 6.54, in northern and remote locations, the owner-operator is often a provincial or territorial government. Sometimes it's a local entity. The hard reality is that there are challenges in building and maintaining the infrastructure. It's very costly, and the traffic volumes alone are not sufficient to pay for it. The Greater Toronto Airports Authority does not need financial help in providing for the safety of its airport. At Pond Inlet and Cambridge Bay, they need assistance.

To try to address the challenges in paragraph 6.54, we have done the following. First, we've built into the structure of both the airports capital assistance program and the national trade corridors fund specific provisions to make it easier for northern and remote airports. The cost-sharing ratios are higher. Some of the specific requirements are less onerous.

Second, we've done extensive engagement and partnership building. We're reaching out and we're working with people so they understand how the programs work and they understand the cycles. We're trying to help them line up their planning and their needs with the new programming that we're putting in place to meet those needs.

[The Chair, Conservative, Kevin Sorenson]

We're already a minute over. We'll have an opportunity to come back to you, Ms. Shanahan.

Mr. Nuttall.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair.

Thank you to the Auditor General's office as well as to Transport Canada for being with us today.

I'd like to pick up where Brenda was just leaving off.

One of the things I noticed from the stats in the report is that roughly 67% of the airports responded. My experience, having gone through audits in the private sector, etc., is that when there isn't a response, it's usually for one of two reasons: they don't want to give the information, or they don't have the information.

When you sent out the request to determine what the capital needs were—which I believe is what this is referring to—was there any follow-up with the leftover 33% of the airport authorities?

[Michael Ferguson]

Actually, Mr. Chair, the reference is in paragraph 6.55. That is the 67%. It's actually referring to when Transport Canada asked the airports to identify their safety-related projects in the next three years and 67% responded.

It wasn't our survey; it was one that Transport had done.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Sorry about that.

I'll move the question to the Department of Transport.

[Michael Keenan]

Mr. Chair, that's a very good question.

This was done as part of the evaluation of the airports capital assistance program. We did one round and we took the information that we received, but we did not chase those that didn't reply. I think it's a fair statement that they fell into the two camps you're describing.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

While it's not necessarily contained within the report, that's a potential major liability that needs to be looked at.

The other item in here, which was outlined in the same paragraph, is the funding level.

The question I have concerns the airport authorities that have outlined a specific number of projects with a certain amount of money. Are capital plans produced by these airport authorities to help provide information to Transport Canada on an ongoing basis, or to provide information to the Auditor General as part of this report?

[Michael Keenan]

Mr. Chair, I think it's important to distinguish that this number came from a survey the department did as part of its evaluation of the program, which is different from the actual programming applications. In the case of a survey, you fill out the answer. On the programming applications, we tend to get more information—I think it's fair to say—in terms of the actual capital plan and in terms of the needs, etc.

If you use the language of surveys, there is a different survey frame when we're trying to evaluate the program versus the kind of information we ask for when we're trying to operate the program and become a funding partner to the owner.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

I guess my questions are outside of a request for programming and assistance. Back in my municipal background, one of the things we underwent was the framing of a capital plan on the infrastructure deficit that existed. I'm trying to understand what type of infrastructure deficit exists across the board when it comes to northern Canadian airports, and if we have some information and data to say, for instance, that the shortfall in funding is actually this much, according to the capital plans that are being put forward, and to then highlight within those capital plans the most pertinent projects, the important projects, to deal with on a priority basis.

[Michael Keenan]

I think the sense is this. First and foremost, it's the view of the Government of Canada that there's an infrastructure gap in the country, which is why the Government of Canada has made such a big investment in infrastructure writ large. Second, it is the view of government, and I think the assessment shows, that there's a deeper infrastructure gap in northern Canada and in remote communities for all of the reasons we've been discussing here this morning.

To be frank, I think to try to put a precise dollar figure on it is difficult, and in fact it becomes a little bit arbitrary in terms of what the questions are. What are the aspirations for your community? What are the aspirations for the region? What are the opportunities for the economic development, social development, and quality of life improvements in the region? I think we see it as a moving target. We see it as one for which you establish the priorities through an iterative approach. There's no one magic capital plan at one point in time that does it.

That leads us to the importance of engagement, consultation, and partnership building. It takes sustained, structured engagement, communication, and information sharing among the communities, the owners of the infrastructure, and funding partners like the Government of Canada and other partners. An important partner here actually is Nav Canada, because Nav Canada is in the middle of modernizing its infrastructure. That's a key part of the piece here.

I think we see it as an ongoing effort in which you're working to get the best shared understanding of where the most pressing needs are and where the investments will have the biggest payoff in terms of meeting the transportation needs and in terms of eliminating bottlenecks. Those change over time. With economic development in the north, as those patterns change.... For example, at individual airports you can see enormous fluctuations in volumes. It's not on the Auditor General's list of 117, but Fort McMurray has had a tremendous change in the volume of passengers through it because of the change in the economic circumstances of the oil sands. We've seen that in a number of our remote communities.

It's not fixed in time. You actually have to stay dialed into the communities and the owners and the operators to figure out where at any given time the best investment is to be made. I think what we have here is an opportunity to make a new set of investments, that we haven't made in the past, with the new programming and the new funding that the Government of Canada has put in place to address the challenges identified by the Auditor General.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Keenan.

We'll now move to Mr. Massé.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for being part of the committee's activities. It is very important.

I am a member of Parliament from a remote part of eastern Canada, the Gaspé, and I can assure you that the issue of infrastructures, be they ports, airports or railways, is critical for my fellow constituents and myself. I echo what our colleague Mr. Deltell said earlier about what needs to be done to ensure that our communities develop, whether they may be remote or in the north. We need quality infrastructures to provide transportation for passengers, goods and materials, and so that those with serious health problems can get to quality medical services. This infrastructure is essential.

Mr. Keenan, when you made your opening remarks, saying that the Office of the Auditor General was focusing on issues of airport infrastructure rather than on issues of aviation safety, I sensed—perhaps wrongly—a little detachment, a little lack of responsibility, in that statement. Perhaps I am mistaken—you can comment—but, in my opinion, there can be no aviation safety if there is no quality infrastructure. If the runways are not adequate, if there is no system of navigational aids, no lighting, no computer systems that are able to ensure the safety of the aircraft, there is a problem.

That leads me to ask you this question. Given all the programs that Transport Canada has access to, given that you mentioned that you were a participating partner—for me, a partner is a key player in working with other departments, in supporting communities in developing plans and chasing down available funding—I was a little surprised to see the following, in paragraph 6.44 of the Auditor General’s report: “Transport Canada’s 2011 study, Northern Transportation Systems Assessment, noted an anticipated need of approximately $312 million to support priority infrastructure projects at 10 northern airports.” The report also indicates that: “…the Department did not follow up or use the report…in developing a plan.”

First of all, is that correct? Second, if you say you are a partner, how is it that, after seven years, the Auditor General’s report can still contain such a statement?

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Massé.

Go ahead, Mr. Keenan.

[Michael Keenan]

Mr. Chair, I agree absolutely with the gentleman when he says that aviation safety and the quality of the infrastructures are very closely linked. I completely agree. As the Auditor General has just said, even although the two are very linked, the central reason for his audit is not aviation safety, because Transport Canada looks after aviation safety. This is about the ability of the airports to operate with more means and in ideal meteorological conditions, if I may put it that way.

I absolutely agree with the framing of the connection between these two. As a deputy minister of Transport Canada since early 2016, I find it a little difficult to tell you in the first person exactly what was happening back in 2011, but I can say that I think the assessment that there is an unmet need is absolutely fair and right and that it is incumbent on the Government of Canada, and in particular Transport Canada,

… to lead discussions, to lead development projects and partnerships in order to respond appropriately to the deficiencies in air infrastructures in the remote communities of the north.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Your time is up. Thank you, Mr. Massé.

I will move to Mr. Nuttall and Mr. Deltell on a split.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair. I'll be very brief.

I think it's important to note that if we don't know the full extent or if one's department doesn't know the full extent of the requirements, then we're never going to have an opportunity to fix those issues. I guess to follow up on my last question, I'm not asking about the priority of just expanding existing airports. Is there not a list within Transport Canada, a document somewhere, that shows the deficit of existing infrastructure just to bring things up to snuff, if you will, and then a separate plan that says this is what we aspire to be as a local airport authority? Increasing operations, maybe with regard to time of day, time of year, or number of runways, is a separate issue. What's the infrastructure deficit just to maintain the current services within each of the airport authorities?

[Michael Keenan]

Mr. Chair, it's a great question. It cuts to the heart of setting priorities in implementing infrastructure programs. Transport Canada certainly has solid sources of information in terms of infrastructure needs and infrastructure deficits. I think the study you were referring to in your previous comments provides some information but it is far from perfect, in part, as you point out correctly, because the response rate was well below 100%.

We do a range of studies and economic analyses assessing infrastructure gaps and in particular where you can actually get value for money, to demonstrate the value of infrastructure investments. A lot of that work went into the creation of the national trade corridors fund. The pressing infrastructure needs in northern rural communities are the reason that fund includes a dedicated element of $400 million for territorial northern infrastructure.

I would say that we would be hesitant to take our understanding about infrastructure gaps and to operationalize that with us unilaterally determining where to make the investments. That's the reason why we agree with the Auditor General's reports in terms of exercising leadership, building the relationships, engaging, and working with partners, so that between their identification of their capital plans and their needs and the application of our criteria and the program, we can sort out where we think the biggest value is in the next dollar of infrastructure programming.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Keenan.

Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I would like to follow up on that. As publicly elected people, we are concerned about how to invest and the future of our investment and what the plan is. If there is no plan, there is no need and there is no result. How can we evaluate the result if we have no plan?