Transport Committee on May 2nd, 2016

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

So it was based on the provinces?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Yes.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

I need to understand because I know you, your staff, and the PMO have had nine meetings with Air Canada since December 15, and another meeting two days before you announced this Air Canada Public Participation Act.

Was this act discussed in those meetings?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I did not meet with Air Canada or discuss this matter.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Your staff would have, I'm assuming.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

You would have to show me what your referring to in terms of meetings. You say there were a number of meetings. We would have to look at that.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Sure. December 5, January 8, January 22, January 27, February 3, and then February 15, two days before this was announced.

I'm just trying to understand in terms of coming to an agreement and resolving things if it's based on the province and future litigation. I'm wondering if we have some information here, some briefing notes, or whatever it is that this committee could have a look at in how that supports the bill and how Air Canada was involved in that process.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Could you give us the dates that you mentioned formally?

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Yes.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I have met with Air Canada to discuss other things, but I have not met with Air Canada to discuss this act.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Okay.

I'll turn over the balance of my time to Kelly.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

Minister, on the one hand you stated the law needed to be modernized to ensure this carrier would be able to compete in a progressive global marketplace, and yet in answer to one of your colleague's questions you stated you didn't have any idea what the economic benefits to Air Canada would be.

What was the compelling argument that was brought forward to you to introduce this bill to change the Air Canada Public Participation Act now, if you don't know what the economic benefits to Air Canada will be as a result?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Let me be clear again. The reasons we are modifying this law are: first, we want to avoid litigation in the future; second, we recognize that Air Canada has to operate in a very competitive environment, and therefore we want to allow it a greater margin of manoeuvre.

I'm not sure about the economic benefit to Air Canada argument that you're bringing up. Could you explain that to me?

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I believe my colleague across the way asked what sort of economic benefits there would be to Air Canada. How would this change actually—

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I'm sorry. Let me be a little more explicit on that.

A company that operates hundreds of airplanes has to maintain them. Those are considerable costs. If we're to make sure that Canadians feel, when they get on an Air Canada airplane, that it's safe, there are considerable costs involved with making sure that those airplanes are safe. Those are considerable costs for a large company like Air Canada.

If it has more leeway in deciding where it's going to do that maintenance, I think that allows it to achieve a more optimum, if you like, financial situation as opposed to being constrained to be in specific locations.

I hope you understand what I was trying to say.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Could you tell us what the costs are currently?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

No, I can't tell you what the costs are now, but I can say that if a company is given the leeway—like WestJet is, or Porter, or Transat, or any other company that operates in Canada—of going out and saying, look, I need this aircraft maintained, and everybody who wants to maintain it can come out and bid for it, they can usually get the best possible deal financially, rather than if they are in a situation where they are more constrained in terms of their choices.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Garneau, as Minister of Transport, you have just said that doing aircraft maintenance in Canada is not competitive. Shouldn't this be a source of concern for our country?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I'm not the one who said that.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

No, but you are implying that we will go to foreign markets and that this will make that possible. It implies that due to its current obligations, Air Canada is not in the best position to provide this.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Let me reassure you, Mr. Berthold.

Our airline companies know that their future depends on the quality of their maintenance, and that this is crucial. As you may have suggested, the point is not to find the company that will do this for the lowest cost. The quality of maintenance is of primordial importance, because when there is an accident, there are consequences for the airline. I am sure that there is a great deal of aircraft maintenance expertise in Canada and that Air Canada is very well aware of this.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Over to Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair, and thank you, Mr. Minister.

Minister, what might some of the impacts be on Air Canada, its employees, and Canadian travellers if the legislation is not updated to reflect today's market realities?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I make no secret of the fact that Air Canada and its public—because they've made it public in the past—have not been overly pleased with the fact that they had specific constraints imposed upon them, and they often invoked the fact that this did not allow them to be as competitive.

Obviously the better a company is doing financially, the more services it can offer, the more it can expand.

I make no secret of the fact that Air Canada has in the past spoken about some of its other obligations that remain there, and wish that they didn't, but those have not been changed.

But with respect to the issue of maintenance, which is a considerable cost for a company, they have wanted for a long time to change things. If they have that leeway I believe it helps their bottom line and ultimately helps the consumer, but I can't give you specific numbers at this point.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Minister.

I have a second question, if I may, Madam Chair.

Minister, in your view, the Mulroney government, back a few decades ago, privatized Air Canada. Was it the right thing to do, and how does this bill, Bill C-10, fit into this logically?