Transport Committee on March 8th, 2011

[The Chair, Conservative, Merv Tweed]

I have to ask you to be very brief in your response.

[Serge Gélinas]

I'm going to try to answer as briefly as possible.

You seem to be concerned about the shareholders. Air Canada shares have gone from $20 in 2006 to $2.50 today. Given that Air Canada is 75% owned by Canadians, it is Canadians who have lost huge amounts of money. Where did that money go?

A total of $5.3 billion was taken out of Air Canada to be redistributed to Ace Aviation shareholders. That is a financial scandal that the papers didn't talk about.

If there is genuine concern for Air Canada shareholders, why not have left the $5.3 billion for the Air Canada shareholders, instead of sending it to Ace Aviation shareholders so they could get richer and the Canadian public could get poorer?

As well, there is an advantage to having operation and overhaul centres. Air Canada is not complying with the act. As Ms. Sénécal said, our operation and overhaul centres are among the safest in North America. I have articles saying that safety will be jeopardized in El Salvador. The important thing for El Salvador is to make profits. Safety is not a priority.

If Air Canada closes its operation and overhaul centres in Canada and has maintenance done in El Salvador, obviously safety will be lower.

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

We've heard that.

It's all right. My time is done.

Thank you very much.

[Serge Gélinas]

Obviously safety is going to suffer.

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

Could you slow down a little bit?

[Serge Gélinas]

For sure...

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

I get articles from the gentleman in the booth telling me to do that all the time.

[Serge Gélinas]

Safety is going to decline, for sure. So there will be greater possibilities of a plane crash or accident. If an accident were to happen, as happened with Swissair or other companies, the shares wouldn't be worth anything.

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

With respect, you've clearly confirmed we're not even looking at that case right now, and it's in the contract that they can't move them without Air Canada's approval. You've already confirmed that is not going to happen.

[The Chair, Conservative, Merv Tweed]

Mr. McCallum.

[Serge Gélinas]

It will be until 2013.

[The Chair, Conservative, Merv Tweed]

Order, please.

I'm going to do one more round of five minutes, and we'll go from there.

Mr. McCallum, please.

[John McCallum, Liberal, Markham—Unionville, ON]

Contrary to what Mr. Jean says, they haven't confirmed that this is not going to happen. The concern is that the move of the jobs will happen after the contract expires in 2013. It is the issue that is on the table.

I completely agree that these jobs have to be protected. Air Canada has to comply with the letter and spirit of the act. There may also be a risk relating to the safety of its planes.

But could be be clearer, and explain what you want the government to do exactly?

I'm with you in spirit, but I don't quite understand what it is you want the government to do. Would you like the federal government to take Air Canada to court and in its court case require that Air Canada respect the letter and spirit of the law, for example, by acquiring a majority interest in Aveos? Is that what you want the government to do? I haven't clearly heard exactly what you want the government to do.

[Jean Poirier]

Yes, that is what it could do in the last resort. Has the government told Air Canada to comply with the act? Has that been done? That is the first thing that has to be done.

If we read what is going on and the legislative news releases, the government has an obligation to tell Air Canada that if it does not comply with the act there will be legal action.

I absolutely agree with you, Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

It's okay until 2013, because you agreed that Aveos cannot move the jobs before 2013, when the contract expires. For future contracts with Aveos, do you want Air Canada to require that all the jobs on Air Canada aircraft repair and maintenance be done in Canada? Would that solve the problem?

[Jean Poirier]

No, because even if we say it's good for two years, that isn't true. In fact, by April 14, there will be no Air Canada employees left in its hangars. Aveos will therefore not be bound by the act. All those employees can then disappear.

Today, Air Canada is Aveos' minority shareholder. I think it has 17% of Aveos shares. In order for Air Canada to comply with the act, it has to be the majority shareholder, it has to get 34% of the shares back. That has to be done now or else there will be chaos.

At present, some employees are sending me requests for retirement because they are afraid of what's happening. That has to stop now.

[John McCallum, Liberal, Markham—Unionville, ON]

I think one option would be for Air Canada to be a majority shareholder of Aveos.

Would it not be equally good if Air Canada could somehow require that the work done by Aveos be done in Canada? It's Air Canada's planes that we're talking about. If it were a requirement, it wouldn't really be necessary for Air Canada to be a majority owner. Is that not correct?

[Serge Gélinas]

The act is written clearly and it's the Minister of Finance who has to administer it and enforce it. He is the one who was designated in 1989 by order in council as the one responsible for the act. The proof we are giving you is found in Bill C-129 which was passed in 1988. In our opinion, the act is clear: Air Canada cannot sell its overhaul centres as it has done. The first recommendation we read you earlier asks that Air Canada comply with the act by returning to being the majority owner of its overhaul centres or buying them back in full and that it comply with the act.

[John McCallum, Liberal, Markham—Unionville, ON]

You're saying that in order to conform to the letter and spirit of the law, Air Canada has to be a majority owner of Aveos.

[Serge Gélinas]

Yes. If we observe Aveos' history, it is "financial spaghetti". So if Aveos is ever included in the act, Air Canada and Aveos are immediately going to create another entity. They will sell the maintenance bases again, and so on. We think the act is clear: Air Canada has to be the owner of its maintenance bases.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Guimond.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

We are approaching budget day. The federal budget will be tabled on March 22. There will be three votes, on March 24, 28 and 29. Technically, if the budget is not passed, an election will be triggered.

To make sure that everyone understands properly and that we all have the same information, I would like to know how many jobs are threatened in Canada. How many in Montreal, Winnipeg and Mississauga, and also in Vancouver, which is affected even though it isn't in the act? How many jobs are we talking about? Are we talking about 222 jobs or 2,242 jobs?

[Jean Poirier]

We're talking about 4,500 direct jobs and 23,000 indirect jobs. Those aren't my own figures. They are the figures from a university study that was done to determine what the impact of a transfer of activities would be, in terms of jobs.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Are we talking about people earning minimum wage?

I wouldn't want my comments to be misinterpreted. In any event, Mr. Dhaliwal isn't here. So I can't be accused of incompetence or opposing the transfer of jobs to El Salvador and be told that the Bloc Québécois is against El Salvador. Quite the opposite, it's a very nice vacation destination. But Mr. Dhaliwal isn't here, so I can't be accused of anything. He will see, Mr. Dhaliwal, I have a long memory.

What is the average wage? Not counting overtime, how much does a machinist like you earn at Air Canada on average?