Evidence of meeting #30 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was aveos.
A recording is available from Parliament.
8:55 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I think all of us share a great deal of sympathy for those who have lost their jobs. I think it's clear that political grandstanding and screaming and hollering is not going to give those jobs back. So I think today my questions are going to focus on the facts, which is the only thing that is going to matter to workers on the ground for Aveos and for other companies.
To start with, you have 2,400 maintenance and overhaul in-house employees...?
9 a.m.
President and Chief Executive Officer, Air Canada
Yes: 2,400 maintenance employees at Air Canada.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Will any of them lose their jobs as a result of the Aveos declaration of bankruptcy protection?
9 a.m.
President and Chief Executive Officer, Air Canada
No. Indeed, as a result of the Aveos dynamic, we expect that we would be looking to hire more people over the passage of time.
9 a.m.
President and Chief Executive Officer, Air Canada
In Canada. Virtually all of our maintenance employees are in Canada, because that's where we do our own maintenance work, and when the company was sold in 2004 we retained a large portion of that. Since 2007, as I indicated, we actually increased the number of Air Canada maintenance jobs by about 35%.
9 a.m.
Conservative
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Can you repeat—your microphone didn't come on early enough—that you do not intend to terminate jobs in-house as a result of the Aveos bankruptcy protection? Is that correct?
9 a.m.
President and Chief Executive Officer, Air Canada
That is correct. Not only do we not intend to terminate jobs, we intend to increase jobs inside Air Canada as time goes on as a result of that.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Can you repeat what percentage of your overhaul and maintenance work you were awarding to Aveos over the last several years?
9 a.m.
President and Chief Executive Officer, Air Canada
I don't have that, but we can get that statistic to the committee.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Do you know what percentage of Aveos's revenue came from Air Canada?
9 a.m.
President and Chief Executive Officer, Air Canada
We understand that about 60% to 65% of their revenue came from Air Canada last year.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
You were prepared to provide an additional $15 million in financing to keep Aveos going.
9 a.m.
President and Chief Executive Officer, Air Canada
We understood Aveos was running out of cash. We proposed several alternative financing arrangements to them, including this $15 million, which was referenced as debtor-in-possession financing. If they had chosen to restructure, it would have allowed for an orderly restructuring. It would have provided some time to the organization and the employees so that they would not have had to close down as brutally as they did. But they chose not to take it.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Given that there is nothing in the act that would allow the government to force Aveos out of bankruptcy, the only proposal that the opposition could potentially make to keep Aveos operational would be a direct taxpayer bailout. Do you have any estimate of how much taxpayers would have to pay in such a bailout to return Aveos to operation?
9 a.m.
President and Chief Executive Officer, Air Canada
I really don't, to tell you the truth. We know that in Aveos, when the company was sold, the total amount invested in Aveos through equity and debt financing was about $975 million. That was in 2007. They've been operating for five years since then. That was the total investment made at the time. That would be one indicator of a benchmark, and the company failed.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Almost $1 billion was already invested in Aveos. It was not able to function with that $1 billion. That indicates how much would be required of taxpayers to provide a full bailout to keep that company operational.
9 a.m.
President and Chief Executive Officer, Air Canada
That was the value at the time. The people who invested in Aveos in 2007 were sophisticated, private equity investors and large financial institutions, people who had made these sorts of investments before. The company was given the opportunity to have a well-capitalized group of shareholders and it didn't work.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
If we were to provide, as the opposition seems to suggest, a $1 billion bailout for Aveos, that money would either have to be borrowed or it would have to be taxed out of the economy. Whether you borrow $1 billion out of the economy or tax it out of the economy, the effect is the same.
Do you think that borrowing or taxing $1 billion out of the economy to help this one bankrupt company would be a net job creator or a net job destroyer?
9 a.m.
President and Chief Executive Officer, Air Canada
I've chosen a life other than politics, federal or municipal, so I couldn't really answer questions that deal with taxpayer money.
9 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I'm going to turn the rest of my time over to Mr. Toet.