Public Safety Committee on May 8th, 2017

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Going back to the travellers for a second, my understanding is that about 12 million passengers per year are pre-screened. Do we have any projections for what that number would be under the new legislation?

[Jill Wherrett]

That's correct. It is about 12 million per year. I don't believe we have any projections. I'll turn to my colleague from Transport to double-check on that.

[Tom Oommen, Acting Director General, Surface Transportation Policy, Department of Transport]

The number of passengers pre-cleared has been growing at the same rate as passengers headed to the U.S. That follows economic changes. The value of the dollar has a big effect. It tends to be quite responsive to economic factors such as those, but year on year there has been steady growth in passengers that—

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Is that 2% or 3%, or it's hard to say?

[Tom Oommen]

I can't give you an exact number.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Maybe get that to me if you have a chance.

[Tom Oommen]

Yes.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Another aspect of this is the cost for Canadians of air travel because of surcharges, and airports such as Pearson with their surcharges as well. It actually drives Canadians, at least those close enough to the border, to use U.S. airports. Buffalo is a common one for the GTA.

Do you have any projections on whether this bill will reduce the cost of air travel for the average traveller?

[Jill Wherrett]

We don't have specific projections on that. There are two points to make in terms of the agreement.

The agreement does provide for cost recovery for new pre-clearance operations, so the eight existing airports are protected from cost recovery unless there's some kind of extraordinary request for special services outside of the normal operating hours of pre-clearance operations. In terms of new sites, there are provisions for cost recovery. Similarly, if CBSA were to go to the U.S. and do pre-clearance, there would be cost recovery for operations.

Those discussions are happening now. They are site-specific, in terms of discussions between the U.S. and the individual pre-clearance sites for pre-clearance in Canada. But one of the pieces of work the Canadian government is doing is to work closely with the U.S. to ensure that we understand the framework for cost recovery that they're applying and to keep costs as low as possible for the traveller.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Has the Government of Canada done any studies on costs to Canadians? My understanding is that we rank 124th in the world in terms of cost competitiveness in air travel. Have you done any independent studies on that? Is it something your department is seized with?

[Tom Oommen]

The government is concerned about the cost of travel, air travel in particular. That isn't specifically related to pre-clearance, though. That's pretty much a separate issue.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes, but if we're doing cost recovery...? I'm all for pre-clearance, believe me, but I'm also concerned about being cost competitive when it comes to air travel for Canadians. It's a topic that you might want to consider.

Thank you.

[The Chair, Liberal, Rob Oliphant]

That did come up in Washington on our trip. I've made notes on American officials' suggesting that they've already been asked about expanded border services on a cost-recovery basis that would cost Canadian travellers more, because it would be passed on. It was raised on our trip. I could see a little bit of the light going off in their eyes in terms of more cost recovery. If they were to provide those same services on their own soil in a non pre-clearance operation, they would be doing it in those airports.

Now, I could argue that you're going to get charged by an airport in either end of your destination. I think there's some work, though, that needs to be done on that.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I agree with what you just said. The point is that we're already non-competitive. We're 124th in the world in terms of cost competitiveness, so this has a disproportionate impact on Canadian travellers because we're so non-competitive right now.

[The Chair, Liberal, Rob Oliphant]

Yes, go ahead.

[Jill Wherrett]

That certainly is factoring into the discussions we're having with the U.S. to make sure that a fair and clear cost-recovery model is applied, but it also factors into the decisions, finally, about whether a site will undertake pre-clearance. It has to be economically viable for the operator of the facility, for the air carriers that the cost would be passed along to, and ultimately, for the passengers. That will certainly factor into whether pre-clearance operations would start in a particular site.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you.

[The Chair, Liberal, Rob Oliphant]

Mr. Dubé.

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

Thank you, Mr. Chair.

Can anyone tell me how many changes to regulations will be made as a result of this agreement? They are not in the bill, of course.

[Jill Wherrett]

I can't speak to, specifically, how many regulatory changes will be required, but there will be regulatory changes required in relation to both part 1 and part 2 of the act. Part 1 is U.S. operating pre-clearance in Canada, and part 2 is Canada operating pre-clearance in the U.S. Some of the examples of the types of regulations that would be required under the act would be regulations to authorize persons, or the categories of persons, who would have access to pre-clearance areas. We will need regulations for that in Canada, and to establish conditions for that access. We need regulations on how to authorize how detained goods would be disposed of. Then regulations will be created or amended to permit CBSA to administer its various acts and regulations on an extra-territorial basis. There's a long list of acts that CBSA administers.

I don't know, Martin, if you want to add anything to that. That's quite an extensive exercise.

[Martin Bolduc]

According to the analysis that my colleagues have done, the CBSA's preclearance activities on American soil will mean amendments to about 200 regulations.

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

I don't want to add to your workload, but it is important for us to fully understand the changes beyond the bill that we are studying. Can you commit to providing us with a list of the regulations to which amendments will be made?

[Jill Wherrett]

We are still exploring that right now. I think we could provide you with a general outline of the types of areas where regulations will be required.

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

Yes, please.

My other question is about the costs, but from a different angle than my colleague was looking at when he asked his question.

People in Quebec City are very happy with the news, but they are concerned about who will have to pay for it. The airport authority has said that it is disappointed to find out that it has to foot the bill whereas, in Montreal, the bill was paid by someone else.

Can someone tell us who is going to pay to install the facilities and what impact will that have on the customers?

[Jill Wherrett]

As I mentioned, the current pre-clearance operations are protected from cost recovery. That was one of the elements in the negotiations over a number of years. The U.S. is pursuing global pre-clearance, and they're applying cost recovery in all their operations. In fact, they're obligated to by Congress. Cost recovery is being applied to any of the new sites that are under discussion. Ultimately, it will be again the decision of the airport authority as to whether it makes economic sense for them to pursue pre-clearance and to explore for themselves what kinds of arrangements they may need to make in order to ensure that those costs can be covered.