Transport Committee on Oct. 5th, 2006

[Ed Fast, Conservative, Abbotsford, BC]

Thank you for your clarification.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Bell and Mr. McGuire are next. I'm told they're going to share their time.

[Don Bell, Liberal, North Vancouver, BC]

Thank you.

Mr. Gaspar, this is a follow-up on an issue that has been discussed fairly extensively. That's the issue of pricing and your concerns about it.

I understand that the industry's response to the issue is to say they would develop a voluntary code.

[Fred Gaspar]

That had been the case.

[Don Bell, Liberal, North Vancouver, BC]

Is that no longer the case?

[Fred Gaspar]

Well, there was a different climate. The fuel surcharges you see today are significantly lower than they were back when oil first started to spike two or three years ago; the climate has changed for our sector, and it's a highly competitive one today, so we just don't see the need for it.

[Don Bell, Liberal, North Vancouver, BC]

In other words, you don't want any regulations, but you're not going to.... In other words, you're not going to come up with self-regulation either. You just don't see any need for regulations at all.

[Fred Gaspar]

In other words, I guess what I'm saying is we see the need to be treated like any other industry.

[Don Bell, Liberal, North Vancouver, BC]

Is there not an issue...? Your issue is you want to know who's getting a fee. It might be likened to the gasoline situation. In the gasoline industry, there's one price when you pay at the pump, and that includes federal and provincial taxes, but the price a consumer pays is whatever it is, $1.03 or $1.04 a litre in my area. They, the consumers, don't know....The gas companies have chosen to put a little sticker on sometimes, indicating where the money is, because they companies don't want the public to think that somehow they're getting rich by getting this amount of money.

Is having one price not for the simplicity of the traveller? I presume you agree it makes it easier to compare. There's nothing that would stop your members from listing a breakdown and showing a price of $4.99 and saying it's $4.25 plus this for the AIF and this for whatever else, is there? In other words, you could do what the gas companies do; the retail automobile gas industry is an industry that does do that, so I would appreciate your comments.

[Fred Gaspar]

I think you're absolutely right; there is nothing to prevent us from doing that. Ultimately, at the end of the day, if that's where Parliament wants to go, that's where we'll go. We would just first respectfully offer this perspective: does it make a lot of sense to treat one industry differently from other industries?

Second, are you really serving consumers' interests? Are you really serving consumers' interests when you advocate simplicity, to use your words, and in fact bury everything in the price?

There's a reason we have all these mechanisms to give people information in place throughout society. We have an Information Commissioner. We also believe in the concept of disclosure. We believe people have a right to know what's happening. We have a right to know what's getting our dollar.

Is it a total showstopper for us? Is it a horrible, horrible thing if it happens? No. We'll deal with it. We'll learn to deal with it. Ultimately, it's giving consumers what they want that's most important. We just don't think it makes a lot of sense in the broader perspective of giving consumers what they actually want, which is access to lower costs and to the right mix of service and price.

[Don Bell, Liberal, North Vancouver, BC]

I can understand the concern. I guess the danger is that whichever system you choose to use, if there isn't some degree of regulation, then it really.... No airline is going to offer the all-in-one price, because it makes their price look higher, so it's an economy....

To what degree does international competition play a role? One of the backgrounder pieces indicated it was the competition from fares from international carriers, carriers that wouldn't be bound by the same regulations.

[Fred Gaspar]

That's a very good point, which we haven't had a chance to discuss, and I'm not sure the extent to which it is exempted or included in the legislation, to be perfectly frank. But there is, as you can well imagine, a level of complexity in international airfare marketing that really suggests a need to move in lockstep with our major trading partners internationally. You've all had the experience that you buy a fare that might be marketed by Air Canada but the metal you're flying on might be Lufthansa and you might buy your ticket when you're in France but your ticket involves six stops in Canada. The level of coordination in terms of what the rules are.... We're adding costs to the system, is what I'm getting at.

The more we try to micro-manage the marketing of costs, the marketing of fares, what we're essentially doing is we're creating more jobs for bureaucrats and less real savings for passengers. Is that what we're really interested in?

[Don Bell, Liberal, North Vancouver, BC]

But are we really adding costs, or are we just identifying them or rolling them in?

The final comparison I would give you is not a retail thing, but this is something the public is familiar with. I don't know what it is in other provinces, but in British Columbia for municipal taxes, they pay one tax. That tax includes school tax, for example. It might include a regional district tax. It could include a hospital tax or a transportation authority tax. All they know is they pay $2,500.

What some municipalities have chosen to do is what your carriers could do, and that is break out, on the notice they send out, like the gas companies do on the pumps, that half of that is only what goes to the municipality; the other half goes to the school, and 10%, for example, goes to the regional authorities. So there are areas the public is familiar with where they get an all-in-one price but they get a breakdown as well.

[Fred Gaspar]

That point's very valid, and ultimately, Mr. Bell, as I said, if that's obviously what's passed, obviously we will comply. We want to do right by our passengers. I look forward to getting the same level of enthusiastic support from all members around this table when we come back and talk about issues of cost reduction, lowering airport rents, the things that really drive choice for consumers and really drive costs.

[Don Bell, Liberal, North Vancouver, BC]

You'll get no argument from me on that point.

[Fred Gaspar]

Thank you.

[The Chair, Conservative, Merv Tweed]

I'm sorry, your time is up.

Mr. Lussier, please.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Mr. Gaspar, if I understand correctly there's never been any consensus amongst the members of your association with respect to this bill. On some issues there is no agreement.

That being said, what are the strengths of this bill which would encourage carriers to support it?

[Fred Gaspar]

What motivates Transport Canada to support this bill?

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

I'm referring to your association.

[Fred Gaspar]

Sorry. What are the elements we support. The elements we support, as I mentioned at the outset, are some of the less high profile ones, the ones related to introducing efficiencies at the CTA. For instance, they've introduced some clarifying language to make it clear that when there's a sale of a licence between licensees, the person who is purchasing it must have a valid and unsuspended licence. This is the kind of thing that makes sense to do.

Let me go back to my text, because I didn't memorize them, but there is a clause that exempts seasonal air service providers, so if you have a tourist service that flies to the north only in the summer months, you don't have to go through the onerous notice provisions of when you're cancelling a service to the CTA. It makes sense. It's well known that you're only flying there in the summer, that kind of thing. So those kinds of housekeeping items are some of the ones we see some value in.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Would you be prepared to recommend amendments to this bill?

[Fred Gaspar]

Certainly if it comes to that we would be quite happy to. Are we ready to do that today? No, but only because we see most of our recommendations as being fairly broad, as opposed to technical in nature. So I can certainly tell you today what I'd like to get rid of, but in terms of trying to work with you to identify a half measure on the advertising thing, it's certainly something we're very open to and we would love to engage the committee in discussions on, and we'll be prepared to do so if you choose to invite us back.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

I would like to know how you go about consulting your association's membership. Is it by phone or through personal contacts? Do you meet with members on several occasions? How do you come up with this type of report?

[Fred Gaspar]

At the risk of sounding flippant, the answer to your question is yes, to all of the above. We have a formal structure, which is a committee structure, so we have different committees of our association focused on different topics in the industry and we meet on a fairly regular basis depending on the intensity of the issues. Then in addition they've all got my number, and when a particular member has a particular issue they have a concern with, they let us know about it. We source the views of our other members and we proceed accordingly.

So we both have formal and informal channels.