Transport Committee on March 29th, 2012

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

There would have to be an additional allocation by Parliament for that $1 billion.

[Kristine Burr]

That is correct. I would just stress that this would require, clearly, a decision by the government to do this.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

And what section of the Air Canada Public Participation Act would make such a $1-billion bailout mandatory, Mr. Legault?

[Pierre Legault]

Nothing. There's nothing in the act.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Given all of this information, the proposed bailout for Aveos would involve giving $1 billion to a company that has already burned through $1 billion, a company that has said that a $15-million bailout was not sufficient, a company that has refused to come and explain itself before Parliament and before taxpayers, and a company that has refused to provide any assurance that it would keep the employees on, even if it did receive said bailout.

Given these facts, is Transport Canada prepared to recommend such a bailout?

[Kristine Burr]

We are not contemplating any recommendation of that nature at this point in time.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Thank you.

[The Chair, Conservative, Merv Tweed]

I have to stop there.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank our guests for being here today. What I've heard over this last hour and some 15 or 20 minutes are all the technical and broad provisions of what the compliance requirements are, and I understand all that. I'll come back to some of that.

I think what sometimes gets lost in all of this is that there are a whole lot of Canadian employees who are not working today. If I might speak for everyone in this room on all sides, it's the empathy that we feel for those people. If we have a heart, and we all do, it's that these people are very nervous about their futures and they have families to feed. We as politicians and we as Canadians feel for anyone who goes through that kind of a circumstance. I want to put that on the record. I think it's important that this kind of empathy be expressed. I know it's how we all feel or else we wouldn't be in the roles we have today.

I'm trying to assimilate the information that I've heard today. Madam Burr, I would start with you, please.

Just to be clear, what I heard you say, but I want to be sure, is that Air Canada has fulfilled all its obligations as per the act. Is that correct? Is my understanding of that correct?

[Kristine Burr]

Yes.

[Ed Holder, Conservative, London West, ON]

Is there anything that they have not done?

[Kristine Burr]

Not to our knowledge, no.

[Ed Holder, Conservative, London West, ON]

Therefore from your standpoint Air Canada then continues to comply with the act, from what I've heard you say.

In light of what's happened with Aveos, does Air Canada have any ongoing obligations as a result of the act with employees of Aveos?

[Kristine Burr]

I'm going to defer to my colleague on legal matters, but our understanding is that the employees at Aveos are the employees of Aveos, the private company. I believe that Air Canada is in compliance right now under ACPPA and has no further obligation.

[Ed Holder, Conservative, London West, ON]

Do you have a thought on that, please?

[Pierre Legault]

Again, the only obligation of Air Canada under the act is to include in its articles the fact that they have to do overhaul and maintenance in three cities.

[Ed Holder, Conservative, London West, ON]

Is that a monitoring function that you hold in regard to that, or is that something that, either by complaint or by some form of expression of concern, you monitor whether or not organizations like Air Canada are in compliance? How do you respond to that?

[Kristine Burr]

If I may, I would want to make the point that where we are particularly concerned on a regular basis is whether or not all the safety obligations are being met for overhaul, maintenance, and general arrangements regarding the safety of the aircraft. In that sense, we monitor what is going on very closely. Our colleague, the director general of civil aviation, is in the room if you would like further elaboration on that point.

With respect to the question around the articles of continuance, we check from time to time to make sure they're still in Air Canada's documentation, but we're not scrutinizing every year in any regular, formal way what's going on.

[Ed Holder, Conservative, London West, ON]

You mentioned, Ms. Burr, you have a representative here who could talk to the issue of safety. The issue of safety as it relates to passenger traffic has not been brought up in this last hour and a half. From the standpoint of the Department of Transport, as it relates to safety, are there any concerns that you have today with respect to the safety of Canadian passengers? I think they're the ones who want to know this. With this change of relationship that's occurred, obviously, with Aveos and liquidation, should Canadians be concerned about their safety as they travel Air Canada?

[Kristine Burr]

We asked that very question, and thank you for raising it. I can assure you that the advice we've been given is that there is no concern at all with respect to passenger safety at this point in time.

[Ed Holder, Conservative, London West, ON]

It's interesting. My colleagues opposite, who are as concerned about the employees of Aveos as we all are, as I've heard them talk about it, if they could redirect the world it would seem that they'd like to see a place where all the employees of a separate company go to Air Canada. The other side of it is—and it's not been said by members opposite—that with that is the obvious financial obligation to Canadian taxpayers to provide the kind of money that would take what ultimately, I gather, was an unsustainable company and keep it going.

As someone having been in business most of my life, when you've got smart investors putting almost $1 billion into a company that doesn't go, it doesn't work.... And I can't tell you why, and Aveos is not here to respond to that. It just strikes me that if it didn't work for them, going forward—and I don't know the reasons why—I don't see how that works.

I come back to Air Canada's perspective. I heard testimony earlier that talked about decisions that were made to relieve themselves of certain divisions within their company. They mentioned the aspect that Aveos purchased. They talked about the Aeroplan program, and all of that. From your standpoint, you've indicated safety, clearly, is not an issue, that Air Canada had the right to do what it did, that it's in compliance.

That's more of a statement, Chair, than a question. I know that Mr. Watson had just a couple of questions, if we still have some time.

[The Chair, Conservative, Merv Tweed]

He has 20 seconds.

[Ed Holder, Conservative, London West, ON]

I'm sorry.

[Jeff Watson, Conservative, Essex, ON]

I do have a quick question, or what I hope will be a quick question.

Mr. Legault, in page 6 of the opinion that's been provided here you indicate that you consulted with the trade law section and that ACPPA could run afoul of—or more specifically that amendments to the act that would more define the requirement with respect to Winnipeg, Mississauga, and Montreal may rule afoul of—article 1106 of NAFTA, but also of the Canada-U.S. Free Trade Agreement, which was the precursor agreement.

Can you provide an answer to the committee concerning what aspect of what article of the Canada-U.S. FTA would have bound the understanding of ACPPA at the time?

[Pierre Legault]

As I said before, when it comes to additional opinions, if you wish, about what is found in this opinion, my role is not to provide advice to this committee. I'll leave it at that.