Transport Committee on April 2nd, 2009

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair. I thank the other members for their indulgence.

I think you're right, Mr. Volpe. There have been a lot of studies done, but all of them have shown that it's not viable. That's the issue. You mentioned in your first address that there may be new technology. If there is new technology, I could see us focusing on that new technology and whether, on a macro basis, it might change the viability of the entire operation.

The Alberta government was going to have a high-speed train between Edmonton and Calgary for a billion dollars some six years ago. That price has, I think, quadrupled at this stage.

I'm not sure what the committee can do as far as the viability aspect goes, but on new technology and generational change--and this is the time to do it, if at all--we can do it as a government. The economic stimulus package now might be able to justify the viability of it, so I think it might be more appropriate than I originally anticipated.

[The Chair, Conservative, Merv Tweed]

Go ahead, Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you for that.

Since we seem to be in agreement, I might propose that we put aside two or three meetings as a beginning, keeping in mind that we always have as a first priority any legislation that comes before us. Those meetings can be moved as the legislation comes to us. It moves down the road.

We could set those out now. Then, after we have had our initial meetings, we might be able to focus our minds on where we go next and what kind of recommendation we'd want to put forward, if any.

Is that fair enough?

Do you agree, Mr. Laframboise? How about you, Mr. Bevington?

So I suggest Tuesday 28, Friday 30 and Tuesday 5. Those are possible dates, but if we have other things to do, we can always move them.

Is that okay? We can always move them.

[The Chair, Conservative, Merv Tweed]

The only concern I have--

[An hon. member]

Is legislation.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

No, I said that if there's legislation, that moves everything back.

[The Chair, Conservative, Merv Tweed]

But the only concern I have with establishing that date is that we're going to invite people to come and then we may tell them not to come. Then we may invite them to come again.

We are going to--

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

The first people are our own officials, so they're here. I think that if we can get them at the very first meeting, by then we will have a sense of what our timetable will be with respect to our parliamentary obligations and we can give people a sufficient amount of time.

To follow up on what Monsieur Laframboise says about the Canadian companies, we might alert them to the fact that we will begin a pre-study of this matter and ask them to prepare themselves for a call within, let's say, a couple of weeks. That gives them enough lead time, and that way we won't discomfort them too much. If we tell them now, they'll have a month.

[The Chair, Conservative, Merv Tweed]

Right. I'm more just looking forward. Having looked at Bill C-7, which we will be dealing with on the Tuesday because we're having the minister come on the Thursday for estimates, may I propose that we keep April 28 and April 30 available for Bill C-7, and try to book them for May 5 and May 7?

We know Bill C-7 is here. We know that we're going to deal with it first.

If that's suitable, it just gives us time to finish that legislation. I'm not even sure if that's going to be enough time, but we're hoping.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

You're saying we'll deal with Bill C-7 on April 28 and April 30.

[The Chair, Conservative, Merv Tweed]

The guests we would invite for May 5 would be from the department and would give us the overview. If you think of any other guests over the next week or 10 days, give us a heads-up to get them here. D'accord?

Monsieur Laframboise, are you okay with the schedule? Okay.

Go ahead, Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

One other issue that I'd like to see us consider looking at right now is the issue of Air Canada.

We're in a situation in which our major carrier is potentially into bankruptcy protection. We've heard the minister say that he wants to keep a close watch on this. I think we need to be a bit proactive in terms of understanding the situation with this very large component of our airline industry, so I'd like to see us have an opportunity in the next month or so to bring forward witnesses and get a report on that issue.

[The Chair, Conservative, Merv Tweed]

Comments?

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

My first comment would be that this is a private company that operates at arm's length and it's a serious company and it's a Canadian carrier and we're all concerned with it. But what kind of study are you proposing—to see if it's viable that they're going to go into bankruptcy? They aren't going to share sensitive commercial data. They're not going to share their financial statements or other things that are privy only to them. Even the public ones will not give us a clear indication of what their financial position is.

[Dennis Bevington, NDP, Western Arctic, NT]

Is it that we'll need to actually look at the industry as a whole, then? They would be part of that examination to see whether this recession that we're going through changes what the condition of the industry is and what the likely futures of the private companies within the industry are going to be.

[The Chair, Conservative, Merv Tweed]

Mr. Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

The Air Canada situation is very worrying. Mr. Jean is partly right; it is a private company.

The problem is that all the pension funds of all the employees and former employees are in danger of becoming unstable. Is it up to the Standing Committee on Transport, Infrastructure and Communities to deal with that?

I am very sensitive to this. It is frightening. If the crisis continues, pension funds will probably be attacked in other companies. This is not easy for people who have already retired: they are seeing their income reduced and they may even lose a part of it. These are very serious situations.

The Air Canada situation has lasted longer than the crisis. It has been going on for several years. Is our committee in the best position to discuss pension funds? We should look at that and discuss it at some stage because it is very worrying for Air Canada's employees and former employees.

[The Chair, Conservative, Merv Tweed]

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you for that.

I was going to address that as well, because I think this is obviously an extremely sensitive issue that we have to deal with. For me, from what I've seen of the file, though, it comes back to a lot of management issues. They hedged options at $1.10 a barrel of oil, and oil was only up past $1.10 for a brief period of time and yet they bought a lot of options on that, which didn't make a lot of sense to me from a business perspective, given the volatility in the market.

The pension plan and the realities of the pension plan are currently being investigated with the Minister of Finance, and the parliamentary secretary has that specific file to try to find a solution to it. So if we go and study that and step on their toes, I'm concerned about that being an issue that doesn't get to what's in the best interests of the people who are in the pension.

I'm very concerned with Air Canada. I probably fly more than anybody in this room, I would suggest, and I'm very concerned about it. But at this stage, I do believe that whatever is going to happen in the industry is going to happen well before we study this. And there might be a shake-down just like there was a shake-down back in the eighties and nineties, and just like Australia changed their....They probably have the best and most productive airline industry in the world right now because it's deregulated and it's working quite effectively. Canada is going to have a shake-up and Air Canada's going to be one of those companies shaken up. Although I'm very sensitive to it and I think this committee should be very sensitive to it, it is a private company, and no matter what we study and no matter what we find out, we're not going to be changing anything.

If we're going to study pensions, I think that's a finance issue, and they should study pensions. They're already doing it and the parliamentary secretary is well ahead of the game in that.

What are we going to find out—that they're going to be bankrupt? Well, we're not going to change that. The reality is that I'm concerned about the employees who have pension plans there. That's what I'm really concerned about, and the viability. Just like the auto sector; I'm very concerned about that, because that's not fair to those people who have pension plans that are going to fold.

So I think from that perspective that's a finance issue; that's not a transport issue; it's not an infrastructure issue; it's a finance issue. We should let finance deal with that.

[The Chair, Conservative, Merv Tweed]

Comments?

Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Monsieur Laframboise and I were around when there was the last shake-up. This committee dealt with Air Canada and Canadian Airlines at the time, although obviously the circumstances were a little different from those today.

In part Mr. Jean is absolutely right, that this is a completely private company and there's not a restructuring of the transportation system like that which occurred in the 1990s with Canadian and Air Canada. So we're not in danger of losing the infrastructure of transportation, but we are in the position that—at least for those of us on this side, and I hear the government side agreeing—with those workers dependent on a pension scheme they bought into and contributed to, if we now go belly up, this is something the Government of Canada will have to deal with. Whether it affects us as a transportation committee is another matter. It will affect us all as members of Parliament.

The second issue is that all of us are concerned that there are 23,000 employees who may be looking for an alternate company to employ them, if this is what happens. I don't want to be one of those who will scaremonger everybody into a place we shouldn't go to, and I'm quite capable of pointing the finger at those greedy people who took $2 billion and gave it to shareholders instead of topping up the pension system, as they were—I guess some people would say—obliged to do.

I would like us, notwithstanding the fact that the parliamentary secretary for the finance minister is looking at this, to keep ourselves open. I see that we might have some room on April 30 or whenever. If it comes to the point that we're close to seeing the kind of shake-up Mr. Jean suggests, then it becomes not just a finance issue but a transportation issue. We would at the very least be able to get some of the players around the room.

It's a question of informing members of Parliament, rather than anything else. We no longer have any legislative role to play; we do still have regulatory oversight. We shouldn't lose sight of the fact that Transport Canada is the regulatory body, whether they're private sector or public sector, and we shouldn't give up that particular jurisdiction.

I propose that we keep ourselves open for this, and as I said earlier with regard to high-speed train travel, we have a moving schedule and we have put in an extra day for Bill C-7, so if it comes to it, we would make the adjustment.

I don't know whether Mr. Bevington is okay with that, or Mr. Laframboise. If Mr. Jean is okay, then I think we can keep everybody happy about where to go next.

[The Chair, Conservative, Merv Tweed]

Ms. Brown.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

I want to concur with what Mr. Jean was saying earlier, that the Department of Finance is undertaking a very extensive review of the pensions at the moment. I would hazard to suggest that it might be a conflict of interest for our committee to be taking this on at the same time.

The parliamentary secretary has been across the country in the last three weeks—in fact, he had meetings in Toronto within the last two weeks—and I think his report might be of interest to this committee at some point later on, but I suggest that we would be duplicating efforts. In the interest of being efficient in this committee, I would suggest that we leave that pension discussion with the Department of Finance.

[The Chair, Conservative, Merv Tweed]

Let me suggest that I'll make a connection with the parliamentary secretary to the finance minister suggesting that we may request him to appear before the committee to update us once he has finished his review. I think he has one more week, and then he's done.

Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

I think that's a good plan on your part. I'm not convinced that the only issue we're dealing with here is the pension issue. I think it goes beyond that, as Mr. Volpe pointed out. We might agree to consider what other issues may be involved with the airline industry right now, so that we understand whether the current financial crisis in the world and the downturn in the economy are going to lead to different measures within the airline industry. I think we have to be cognizant of that question.

Certainly we should hear from the industry about whether there's anything within the transportation system that it would be appropriate to do to alleviate some of the problems these companies are going to experience. I think it's incumbent upon us to take a look at that.

Yes, the pension plan is one problem. I hear it's being handled by the parliamentary secretary to the Department of Finance, but I would feel much more comforted to hear the industry say that there are no other issues we should be approaching right now.