Public Accounts Committee on Oct. 3rd, 2017

[The Chair, Conservative, Kevin Sorenson]

Good morning everyone. Welcome here. This is meeting number 68 of the Standing Committee on Public Accounts, on Tuesday, October 3, 2017.

I remind everyone today that we are televised. I would encourage you to mute or turn off your cellphones and communication devices.

In our first hour today we are conducting a hearing on “Report 6—Civil Aviation Infrastructure in the North—Transport Canada” from the spring 2017 reports of the Auditor General of Canada.

Our witnesses today include, from the Office of the Auditor General, Mr. Michael Ferguson, the Auditor General of Canada. He's accompanied by James McKenzie, principal with the Auditor General's office.

From the Department of Transport we have Mr. Michael Keenan, deputy minister; Sara Wiebe, director general of air policy; and Craig Hutton, director general, strategic policy. We also have Ross Ezzeddin, and I apologize that I don't have your title.

[Michael Keenan, Deputy Minister, Department of Transport]

Mr. Chair, Mr. Ross Ezzeddin is director general of programs.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

Welcome.

We will have an opening statement from our Auditor General and the deputy minister. Then we will go into the rounds of questioning.

I'll turn it over to our Auditor General, Mr. Ferguson.

Welcome.

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General]

Thank you.

Mr. Chair, thank you for this opportunity to present the result of our report on civil aviation infrastructure in the north, which was tabled in May 2017.

The audit on civil aviation infrastructure in the north focused on infrastructure needs of remote northern airports and on Transport Canada's leadership in assessing and addressing these needs.

Airports in the north are critical to the communities they serve, particularly the airports in the 117 remote northern communities that we identified where air travel is the only reliable mode of year-round transportation. These airports support the delivery of essential goods and services, including emergency medical evacuations.

The infrastructure challenges of northern airports have been well documented in various reports and assessments. Many remote northern airports need improved lighting, navigational aids, runways, and better information on weather and runway conditions.

We found that Transport Canada had not taken an active leadership role to facilitate collaborative efforts to assess and address the infrastructure needs of remote northern airports. The department's airports capital assistance program provided some funding for projects that help remote northern airports meet the department's safety regulations and standards. Since its inception in 1995, the program has provided about $140 million for infrastructure projects at 67 of the 117 remote northern airports we examined.

In 2016, Transport Canada surveyed airports across Canada that were eligible for program funding about their infrastructure needs. The airports that responded identified almost $800 million worth of projects over the next three years to maintain and enhance airport safety. This included about $100 million worth of projects at remote northern airports. Over the last three fiscal years, remote northern airports received about $15 million in funding from the airports capital assistance program. It's clear that demand for infrastructure funding exceeds the program's annual budget of $38 million.

Our report had two recommendations. The first stated that Transport Canada, in collaboration with stakeholders, should lead the development of a long-term strategy for northern airport infrastructure. The second stated that Transport Canada should work with stakeholders to determine what sources of funding would meet the infrastructure needs of remote northern airports.

Transport Canada agreed with our recommendations and prepared an action plan.

Mr. Chair, this concludes my opening remarks.

We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Ferguson.

We now move to the deputy minister of Transport, Mr. Keenan, please.

[Michael Keenan]

Thank you, Mr. Chair.

Honourable members, as the deputy minister of Transport Canada, I'm happy to be back in front of the public accounts committee. I look forward to the opportunity to discuss the Auditor General's report on civil aviation infrastructure in the north.

We welcome this review as an opportunity to strengthen our efforts to maintain safe and efficient air services in the north, a key priority for the Government of Canada.

This report of the Auditor General focused on airport infrastructure issues rather than aviation safety issues. The report made two recommendations: that Transport Canada lead the development of a long-term strategy for northern airport infrastructure, and work with stakeholders to determine potential sources of funding. The department agrees with both of the Auditor General's recommendations and has identified steps to respond to them.

The first recommendation, specifically, is that “Transport Canada, in collaboration with stakeholders, should lead the development of a long-term strategy for northern airport infrastructure. The strategy should clearly outline the role that Transport Canada will play in addressing the infrastructure needs of remote northern airports.”

Transport Canada is a key participant in the development of the new Arctic policy framework that was announced by Prime Minister Trudeau in December 2016. Led by the Minister of Crown-Indigenous Relations and Northern Affairs, the government is consulting and collaborating on the development of the Arctic policy framework to promote strength, prosperity, health, and sustainability in the Arctic.

One of the Arctic policy framework's main themes will be comprehensive Arctic infrastructure, which of course includes transportation and, in particular, air transportation. In support of this work, and to address northern transportation needs in the longer term, Transport Canada is working with its territorial counterparts to develop a federal transportation framework to better articulate and focus its approach to the unique transportation challenges of the north. This framework would help guide the range of policy, investment, and regulatory measures that can enable new social and economic opportunities in Canada's Arctic and northern regions. A key element of the framework will be the need for stronger partnerships between governments, local communities, and the private sector.

The Auditor General's second recommendation is that Transport Canada should work with the provinces, territories, and stakeholders to determine what sources of funding will meet the infrastructure needs of remote northern airports.

It should be noted here that Transport Canada neither owns nor operates the airports examined in the Auditor General's report, and that identification of the infrastructure needs of these airports should be led by the owners and operators of these facilities. That said, we agree that northern communities have unique infrastructure needs that require a more targeted approach to investment than those in the south, and that we need to exercise leadership in moving forward on that.

In fact, this year the Government of Canada confirmed federal intentions to improve critical transportation infrastructure in Canada, in particular in Canada's north. The national trade corridors fund was announced on July 4. Of its $2 billion over 11 years, up to $400 million has been targeted to specifically address the unique transportation needs of Canada's territorial north. Expressions of interest have already been received, including several submissions for improving northern airport infrastructure. Applications for the first round of funding are due by November 6, and we anticipate the funding decisions in this first round will be announced next spring. In addition, Transport Canada plans to make northern infrastructure a priority in the upcoming round of this new program.

The Auditor General's report is very helpful as we continue to work closely with territorial counterparts, provincial governments, and local jurisdictions operating northern and remote airports. Our work includes a range of activities—teleconferences, site visits, and webinars—to ensure full consultation as we develop a plan for moving forward that is centred on the national trade corridors fund and other possible sources of funds. This increased engagement is resulting in a deeper understanding of the issues and transportation needs in remote and northern air infrastructure, and will be the basis of developing plans going forward.

Mr. Chair, we look forward to the committee's questions and comments on this important matter.

[The Chair, Conservative, Kevin Sorenson]

We'll now move into our first round of questioning. We have Mr. Lefebvre first.

Welcome back. You have seven minutes.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

Thank you, everyone, for being here this morning.

I have a few questions for the Auditor General just for clarification.

I see in your report that you talk about 117 remote northern airports. Now, when I look at the map that you provided us, I'm curious. How many of these are first nations communities?

[James McKenzie, Principal, Office of the Auditor General]

We did not specifically delineate which communities were first nations, but I would say that quite a number of them are first nations and/or Inuit communities.

[Paul Lefebvre, Liberal, Sudbury, ON]

When I look at the map, I see that it should be the great majority, if not the totality, of these. That's why I'm curious to understand the process here. Transport Canada, for the past number of years, said.... In your findings, you said they were not taking a leadership role.

Mr. Keenan, in your statement you said it was up to the owners and operators of these airports to do the work, and they're the ones responsible, not Transport Canada. If these are first nations communities, is it the bands themselves that are ultimately responsible for this? Again, I'm just trying to understand who's ultimately responsible if it's not Transport Canada.

[James McKenzie]

It really depends on the ownership, so it could be the provinces or territories, or it could be local governments that own the airports and therefore have the responsibility to maintain them to the level of their licence or their certification.

[Paul Lefebvre, Liberal, Sudbury, ON]

I guess what I'm getting at is that, certainly if it's local groups, local bands, they don't have any capacity. They don't receive funding from anybody. Would INAC play a role in this? Would Indigenous and Northern Affairs play a leadership role in this, or do they have nothing to do with these remote communities for their infrastructure needs?

Mr. Keenan or the Auditor General, again, I'm just trying to clarify who's ultimately responsible here, because there's obviously a gap that we've identified. Who's ultimately responsible? Nobody says who it is.

[Michael Keenan]

It's a great question. I'd say there are a couple of parts to answering it.

The first is that, of the 117 airports that were in the scope of the Auditor General's study, the vast majority—I'm guessing 80% or more—were owned by the provincial or territorial government that had jurisdiction where the dot is on the map. A lot of them were owned by the Government of Nunavut, the Government of the Northwest Territories, the Province of Ontario, or the Province of Quebec.

Interestingly enough, in Quebec, probably a dozen are owned by the Kativik Regional Government, which is a self-government created through the James Bay accords back in the 1970s. There are a couple in B.C. and Alberta that are owned and operated by a local indigenous government.

Transport Canada does own and operate a number of remote airports, for example, in Churchill. There are some on the east coast of Hudson Bay and James Bay. They, however, were not in the sample of 117 that the Auditor General examined.

With that perspective, I would say that Transport Canada absolutely has an overarching responsibility for civil aviation. We are the agency responsible. In the mid-1990s, there was a significant policy change. Before then, Transport Canada was the owner and operator of a vast number of airports. There was a view that we weren't doing a particularly good job as an owner and operator and as the agency overseeing them. There was almost a conflict of interest. There was a devolution, and that resulted in the situation you see today. Consistent with roles and responsibilities, we believe we have a role in overseeing both airports and the entire civil aviation system to ensure, first and foremost, that they are safe. We have a role in working with partners to ensure that this system is efficient.

I think the core of the recommendations to the Auditor General is that more needs to be done here. We agree, but I think we do not want to second-guess the owners of the airports in terms of what they need, and we need them to identify what they need, and then we want to work with them as partners to help them put in place what they need to ensure they're safe.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, but certainly in the report, you've identified a lot of needs, but financially, there's no....

Obviously, that is where the issue lies. Again, if they identify the needs, and if Transport Canada was not part of that conversation.... Basically, if you're not taking that leadership role, that's, I guess, where the gap occurred, and obviously there's another gap in the funding.

Can you comment on that? Obviously, those were findings from the Auditor General.

[Michael Keenan]

Certainly. I think we have been working with airports as partners, for example, through the airport capital assistance program. They identify needs, and we work with them to help fund those needs to ensure the safe capacity to operate.

In fact, the study the Auditor General is quoting—the 2015 or 2016 study to identify the capital needs of airports—and that identification came out of the operation of this program. It was part of the evaluation of the airport capital assistance program, through which we're seeking to identify exactly what the needs are, structurally. I think it is a fair point that, quite frankly, in the transportation infrastructure of this country, there are some pressing infrastructure needs.

[Paul Lefebvre, Liberal, Sudbury, ON]

That has been clearly identified.

Now I have just one last question, very quickly.

You talked about an action plan. Did we receive that?

[The Chair, Conservative, Kevin Sorenson]

We did.

[Paul Lefebvre, Liberal, Sudbury, ON]

Okay. Sorry, I don't have it.

It's on the website? Okay, thank you. .

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Lefebvre.

We'll now move to Mr. Deltell.

Good morning, Mr. Deltell. You have the floor for seven minutes.

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

Thank you so much, Mr. Chair. Good morning to you, and congratulations on the quality of your French.

Good morning also to all my colleagues.

To the witnesses, welcome to your House of Commons, madam, gentlemen.

The issue before us today is very important. It deals specifically with who we are as Canadians. Canada is a vast northern country. We have the responsibility, each and every one of us, to establish a presence on the territory. Having airports in Canada’s north is essential for the country’s unity, strength, and, I would say, its very being.

If we neglect the airports in the communities in Canada’s north, we are neglecting our country, pure and simple. Occupying territory provides evidence of sovereignty and prerogative. The airports must be preserved, as tools of our development and our presence. We must make sure that the infrastructures are established, and that they are strong and safe.

Nevertheless, we have seen that the Auditor General has some quite serious criticisms. But we applaud the fact that the Department of Transport, Infrastructure and Communities is welcoming his recommendations.

Earlier, Mr. Lefebvre brought up a very interesting point about ownership: the locations of our 117 airports in the far north are in indigenous territory. That is exactly the subject I wanted to deal with. My thanks to him for doing so. Let us continue along the same lines.

Mr. Keenan, you said that a major challenge we will have to face when the time comes to make significant investment in our airports in remote locations is the collaboration between the federal government, the provincial and territorial authorities, and the local communities.

In your experience, do you feel any resistance on the part of any local communities to make the investments and the efforts needed to ensure the quality, the safety and the longevity of our facilities in the far north? We are all aware that we are talking about millions of dollars, which is not an insignificant amount.

[Michael Keenan]

Thank you, Mr. Chair.

This is an important question, and I would say that no, in our experience at Transport Canada, local communities, I think, intuitively.... I should back up one point. In the development of the current transportation 2030 policy agenda, Minister Garneau and Transport Canada held extensive consultations over the course of 2016—dozens and dozens of round tables in every part of the country. Canadians came out and talked about what was important to them in terms of transportation policy. Without exception, local communities understood intuitively and strongly the value of transportation infrastructure, in terms of the quality of life for those communities. That is particularly true in the northern and remote communities where often, as the Auditor General correctly points out, the airports and aerodromes that he examined, in the vast majority of cases, are the only transportation link. So there was a keenness in the communities to expand and improve this infrastructure. I don't think we've ever encountered resistance. I think the question is, in a remote northern area, when you have a relatively low total number of travellers moving and you have very high costs of building and maintaining, how does one get the resources aligned to be able to expand that transportation infrastructure?

I would say the willingness is there and the challenge is to bring the partners together to figure out how to organize the investments to expand that capacity. That was the core logic and motivation behind the structure of the national trade corridors fund, including the special allocation for the territorial north.

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

If there is a recommendation to invest millions of dollars in a specific remote airport and the owner, the community there, or the territory or province resists that and says that it's not necessary and that they can use it as it is, do you have any armour as a minister or as a government to be sure that the renewal will be carried out correctly? Do you have any tool to do that?

[Michael Keenan]

Again I would say it's a problem that we have not encountered, but if we were to encounter that problem, I think there are two principles that would be at play. The first is that Transport Canada would defer to the owner of the airport—in this case it's usually a provincial or territorial government—because they are the ones who are accountable and responsible. However, Transport Canada would demand a minimum level of safety. We've actually had this problem with some small airports. Sometimes it's cutting the trees. There are a number of safety requirements that are absolutely non-negotiable. If an aerodrome is not adhering to those, Transport Canada safety and security inspectors will come in and will take regulatory action under the Aeronautics Act to ensure that happens. An example would be that sometimes we have issues with aerodromes—less in Nunavut—in the south where trees grow on the approach and the aerodrome has to keep the trees cut because of the risk of a plane hitting the trees when it's trying to land.

There are certain things like that on which we will be completely inflexible, because they have to do with the safety of Canadians. Beyond that, we'll work with the owner of the airport on their priorities and try to support them in implementing their priorities both to safely operate the aerodrome and to increase the capacity to meet the needs of the members of their community.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

Mr. Christopherson, go ahead, please, for seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

Thank you, everyone, for your attendance today.

I have to say that when I was going through this, I had mixed emotions. On the one hand, I was quite appalled that an issue of Canadian safety was given so little proper focus. But I have to say, Deputy, I was encouraged by your remarks this morning. I hope, before my time concludes, that we get a chance to determine your comments, especially on the second-to-last page when you talked about what's coming in budget 2017, as to whether or not that's going to be sufficient for the dollar amount. There are two things involved: one is planning and one is funding, and both seem to be inadequate.

There is the map provided on in exhibit 6.1. As have a lot of other members of this committee, I've landed at a lot of those dots, including the one that is second-furthest north, right smack dab in the middle of the Northwest Passage. I distinctly remember looking down as we were circling and getting ready to land. I have to tell you that the one thing that wasn't going through my mind was to wonder how efficient they were. I wanted to know how safe this was going to be.

My concern is that there is a lot of mixing of efficiency and other infrastructure with this, as opposed to that being a stand-alone issue. As a former city councillor, I'd say that nobody has a greater passion for infrastructure, which is the least sexy thing to do with local municipal government, but it's one of the most important things you do. But still my concern is that the airport seems to be sort of jammed into that infrastructure. To me, there is a difference between efficiency and laying the groundwork for economic activity versus safety.

I was very struck by the comments in the report on page 14, paragraph 6.57, where the Auditor General said that, “We further found that the program”—meaning the one that's been in existence so far, the airports capital assistance program, which by the way has had $38 million assigned to it for 17 years straight. Somebody was not making this a priority.

Talking about that program, the Auditor General said, “the program did not recognize the important role that airports play in remote [and] northern communities.” In the same paragraph, he goes on to say:

Furthermore, both certified and registered airports, regardless of passenger volumes, support the delivery of essential services to the communities, such as community resupply of fresh food and medicine, medical emergency evacuations, and charter operations...local...activity.

This is the very essence of life and death for a lot of these folks, for a lot of these communities. Unfortunately, we're hearing that, yes, well, the department is now saying that they are going to step up and do exactly what they didn't do before. What I'd like to hear is perhaps some explanation as to how this could be overlooked for so long, and by that I mean 17 years without increasing by one penny the money that's dedicated to airport safety. How did that happen? I'd like to hear what assurances you're going to give us that we can believe that this time you, the department, are going to do what you promised to do, given that you already promised to do that very same thing.

I'm listening.