Transport Committee on June 4th, 2009

[Toby Lennox]

I'm sorry, but I don't speak French very well.

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

We have simultaneous translation, so that isn't a problem.

[Toby Lennox]

For the GTAA, we want to try to keep the issues of the commercial pressures that we have on a day-to-day basis separate and apart from the question of the long-range viability and how we respond to those challenges. In my mind, those are two separate issues. Yes, of course I have to be a fully functioning vibrant airport authority, and I could talk to you about the challenges that I have on the commercial side, but quite frankly I'm a little more concerned in this forum about those longer-range challenges that obviously high-speed rail is being designed to address. And that is why I say that the airports, the aviation industry, and the government have to be able to take that longer-range view. Use us as a resource to say all right, all the airports in the country have been privatized. The experience within Transport Canada to actually operate an airport and plan an airport has been transferred to the private sector. To put it bluntly, we're the experts now.

So when we talk about something like high-speed rail and projections for traffic, that's why it's important that we be at the table and we discuss it. As I say, sure, I have commercial concerns, but the long-range issues affect me as an airport operator and as a participant in the transportation system.

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

Earlier we heard from the representative of the consortium studying high-speed rail service from Calgary to Edmonton. Two stations are planned for each airport, which would become transportation hubs for airline and rail passengers. Basically, you're asking us to consider the same option.

[Toby Lennox]

That is precisely the point I was trying to make. Airports must become gateways or intermodal links for passengers, cargo and the like.

So they're already there. And regrettably, when I say a made-in-Canada solution, we did not build our airports on rail systems, so we're going to have to make some kind of accommodation.

But as I say, for the passenger in 20 years or 30 years from now who's coming from Ottawa and flying to Tokyo, it's a long, wet train ride if you don't have an airport that you're going to be connecting in. So let's start planning and let's start seeing what we can do now.

You're absolutely right: we look to be intermodal centres for light rail, transit, vehicular traffic, and air.

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

Thank you.

[The Chair, Conservative, Merv Tweed]

That's perfect timing.

Ms. Chow.

[Olivia Chow, NDP, Trinity—Spadina, ON]

A while ago, the GTAA launched a campaign on their rent.

[Toby Lennox]

Yes.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Where is that at now? I haven't caught up with the latest.... I'm familiar with the issue. Are you still in the middle of it?

[Toby Lennox]

No. Quite frankly, we had a campaign on rent, and rent remains a very large portion of our fixed costs, at $150 million a year. However, we're known as being a very expensive airport.

[Olivia Chow, NDP, Trinity—Spadina, ON]

It is expensive.

[Toby Lennox]

We are expensive. We don't shy away from that. We provide excellent service to our air carriers, and our air carriers are very profitable.

Since the rent break was not forthcoming, as an airport operator I have to do everything I can to make it the most competitive airport I can. I do have competition from other airports, such as Buffalo, to which I'm losing 1.5 million passengers a year, but I have to do everything within my power to make sure I'm as competitive and as commercial as possible.

Therefore, what the GTAA has been spending its time doing is becoming as efficient and effective as we can. We've raked our cost structures. In fact in the past two years we've been passing on savings to air carriers each and every year, and we will continue to do so, because that, to us, is in the long-term interests of the aviation business.

[Olivia Chow, NDP, Trinity—Spadina, ON]

With the study on the high-speed rail, is there a bit of concern that one of your big customers, Air Canada, perhaps because of fuel costs and perhaps because of the economic downturn, could be facing financial difficulties? Is that an area you're specifically concerned about?

[Toby Lennox]

Clearly, Air Canada is a very good customer of ours, and we have very strong connections with Air Canada. We think they do a very good job. But I'm looking at this.... I want to step back for a second. Air Canada is merely serving a transportation market, a demand, inasmuch as WestJet is doing the same thing, and inasmuch as Porter Airlines can. I don't know right now who is going to be serving that triangle at the time that this high-speed rail comes in, so I'm looking at that portion of my operation that may be diverted to high-speed rail. I'd rather not look at it purely on that question and try to anticipate who the commercial operators are going to be in 20 years--hell, I may not even be here.

The question, therefore, from a systemic point of view, is who is going to serve that traffic. Are you able to move those people to the destinations you have? I'll be getting on a flight, hopefully, in an hour and a half, and actually almost two-thirds of the people on that flight will be connecting in Toronto, so those are the people who are on your train. I'd rather not get into the question of the commercial question; I'd rather get into the transportation question. Are we making sure that people can still move around the way we would expect them to for the benefit of the country?

[Olivia Chow, NDP, Trinity—Spadina, ON]

Do you think it would be beneficial for the federal government to establish a policy that would say this is a corridor--the triangle, as you've said--that moves a phenomenal number of people, whether it's by highway, by air with WestJet, Porter, Air Canada, the Island Airport or Pearson, plus VIA Rail and, now, with the possibility of high-speed rail? Should there really be an overarching strategy to say that here is what we ultimately want the modal split to be and also what percentage it is, 80%, 20% or 5%, whatever percentage it is? Then we would look at the amount of federal money that is allocated accordingly and say that this, ideally, is how we should go about doing it.

Instead, what I'm seeing now is that there seems to be a policy vacuum and that whatever comes along happens, whether it's the Island Airport, Pearson, rail, or high-speed. I do not see an overarching strategy. Correct me if I'm wrong. If there is an overarching strategy, I wouldn't mind seeing it and having a good discussion about it, because how we move people here....

These are very lucrative flights for Air Canada. It makes a lot of money. If that actually declines significantly because of various factors, whether it's competition from the Island Airport, plus high-speed rail or whatever, then what it means is that smaller communities could lose their flights. Air Canada would be saying that it no longer has enough funds to subsidize the much longer, smaller, money-losing flights to these small communities. You cut off the flights to these communities and they have no access; it's a real problem for Canada, as vast a country as ours is.

[Toby Lennox]

I can answer that very quickly. We're not quite in a policy vacuum. I think the transportation planning to suggest that you would allocate modes would probably defeat the best transportation planners. There is the Ontario-Quebec continental gateway and trade corridor that is being developed, which is recognizing that this corridor is a funnel for passengers, for trade, and for cargo. That's why we see this as a tremendously valuable initiative.

I think you're absolutely right, though, on your later point about aviation access to small communities. You're right. You have to wonder what the country is going to look like if a transportation system is not there to in fact buttress access to these smaller places. That's why I say that we are and we aren't still the country of John A. Macdonald. Yes, that's exactly what I'm saying: we have to be able and be mindful.

[The Chair, Conservative, Merv Tweed]

Mr. Mayes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Thank you, Mr. Chair.

I'll be brief, because I know that a number of people have to catch a flight.

[Toby Lennox]

They're on my plane.

[Voices]

Oh, oh!

[Toby Lennox]

I have no control over that.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

I want to direct my question to Mr. Lennox.

First of all, I want to make it clear here that our government has proven by some of the investments we've made in Toronto and in Vancouver--I'm a British Columbian--that we want to see modern transit. The Canada line that is going in from Vancouver airport to downtown Vancouver is a huge project that we've invested in. Also, with the money that we've announced recently with the premier, we're looking at, with the investment of the City of Toronto, about $3 billion.

[Toby Lennox]

Yes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Here's one of the questions I have. When you build an airport, you would think you'd be a little visionary and say okay, we have the airport out here, and here's how we're going to get the people to downtown Toronto or whatever city. Was that not...?