Transport Committee on Sept. 24th, 2018

[Cathie Puckering]

Discussions with our cargo partners have just commenced on understanding what their future needs are going to be, as they are all assessing the facilities they have in Hamilton.

We've been working very closely with the Hamilton Port Authority and with the City of Hamilton on obtaining a foreign trade designation zone similar to what is available currently in the Niagara region to ensure that our region is competitive for new entrants into the market to be able to channel through application processes and to tap into programs that may be available for them.

Our partners themselves would focus on any of the electronic and technology-related investments and changes to their operations, and would advise us as that information becomes available. I don't have all of the information to answer your question. I could research that and provide further input if needed.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

I have Mr. Liepert next. We don't have too much time left, so let's start maximizing.

Mr. Liepert, this is your round.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

You mentioned the number of people who travel south to Buffalo to fly out of Buffalo. Is that strictly because flights are cheaper, or is it because they don't want to sit on the freeway for four hours to get to Pearson? If you could offer the same-priced flight out of Hamilton, would people from Niagara fly from Hamilton to West Palm Beach, versus Buffalo to West Palm Beach?

[Andy Gibbons]

I'll just read you what the Buffalo airport says and what their value proposition is.

They have two elements on their website, “save time” and “save money”. Under "save time”, they have “The average peak wait time at Buffalo checkpoint is only 12 minutes. If you fly from Toronto Pearson you are instructed to arrive at the airport 3 hours before your flight.” That's not the case in Buffalo. “No additional airport stop for customs and immigration.” That's for U.S. destinations. They're positioning the choice. I sound like a commercial for them, and I'll stop here.

What they're saying is that, if you're flying transborder out of Pearson, you have to go to pre-clearance, etc., whereas all you have to do, if you're flying from Buffalo, is cross the border with your NEXUS card, and the infrastructure is there. Then you're in Buffalo free and clear, having your Chick-fil-A sandwich. They also say the Buffalo Niagara International Airport is mere miles from the Canadian border and QEW.

On the money side, they say the Buffalo airport is ranked 23rd in the U.S. for the most affordable airfares. The cost of parking is low. There are no international taxes or fees to fly to U.S. airports, because it ceases to be an international flight. These are some of the unique market dynamics we're saying we should take a look at, and they're felt here as much as anywhere else in the country.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

The other area, probably not to the same extent, is on the west coast. There is a fair bit of migration south of the border flying from Bellingham to points in the U.S. It's not just here; it's elsewhere.

[Andy Gibbons]

Yes, and Abbotsford is our western hub, so the dynamics I talk about here are almost replicated in Abbotsford, and working with that airport is precisely to create the low-cost hub as an offset for YVR.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

It seems to me that there are airports in the U.S. that happen to be close to the Canadian border and can offer less congestion and whatnot. It wouldn't be a whole lot different if New York City were located on the other side of the border. You could probably make a case for Americans to come to Hamilton and fly if you offered the same kind of thing as Buffalo. I understand the cost factor, but I do think a lot of that is getting away from the time it takes to get processed.

[Andy Gibbons]

For sure, that's the case. That's part of our recommendation. David Emerson talked about this in his report. In terms of the CBSA, we take tarmac delays at Pearson International Airport because the customs hall is full at terminal 3.

Technology is going to help with that. Kiosks are going to help with that. They are going to help the bottlenecks, but we are always encouraging the government to look at it as you would look at a land border. You see the land border. You feel it, and you see the queues, and you don't have to tap your Visa. It's not a user-pay model; it's understood that this is a public good that serves commerce, and I think maybe there's a bit of lag in how we think about international airports.

I do want to touch on the ease thing. That's what we're trying to do in Hamilton and in Abbotsford: identify airport partners who are committed to the low-cost structure and can bring us a business plan that encourages and brings investment. We've done that here. Hamilton is not the only airport in southern Ontario, but it is where we chose to bring our ultra low-cost carrier, so that's a testament to the work of that airport, the board, Cathie and everyone.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I do think there's a market for airlines to hub other than.... You can't go anywhere on Air Canada without going through Pearson. It becomes a deterrent. I'll do just about anything to avoid flying through Pearson.

[Andy Gibbons]

There's a big educational component about ultra low-cost carriers, too, because it is new to Canada. It is something the government sought in Bill C-49. The government sought to bring in foreign investors to fill that market need. We have filled that market need. We'll just leave that to the side.

Swoop is not integrated with the WestJet network. It is point to point. It's a separate reservation system. You don't buy a Swoop ticket from Abbotsford to Hamilton and then connect on to the WestJet mainline to Halifax.

There was an experience of another Canadian carrier around the new carrier they created, so I think some lessons were learned by us there, but it is a very precise, very specific model, and it's new to Canada.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

We'll see how it goes.

[Andy Gibbons]

We're working on it.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I'm good.

[The Chair, Liberal, Judy Sgro]

Mr. Badawey, do you have any more questions?

[Vance Badawey, Liberal, Niagara Centre, ON]

I'm good.

[The Chair, Liberal, Judy Sgro]

Okay.

Mr. Aubin, are you good?

Mr. Hardie, go ahead.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Very quickly, Ms. Puckering, I think you have an advantage perhaps—at least I hope you do—in that you're owned by the city.

Does that include the understanding that they will not allow developers to build townhouses close to the airport, residents of which will then start to complain about noise?

[Cathie Puckering]

It is true that we are an airport that is currently in a residential community, and we are actively involved in an outreach program to ensure they're aware of everything that goes on in Mount Hope airport.

Future development around the airport is definitely zoned. There's the airport influence area, the airport employment growth district, airport land and lands adjacent to the airport that the city has bought and reserved just for that, so that at some point they will be included in the airport boundaries. So there will not be any condos or townhouses developed in the immediate area.

Some residential areas southeast of the airport are not in our flight path. They're not in a noise-influenced area, and that is very much monitored through City of Hamilton bylaws.

[The Chair, Liberal, Judy Sgro]

Thank you very much to our witnesses.

This was our last panel. We've been going at this since nine this morning. I congratulate the committee for keeping it all together. It's been a long day.

[The Chair, Liberal, Judy Sgro]

Thank you for coming out. The idea tonight is just to take a few minutes for those who either didn't join us earlier or think there are some issues on which they might be able to give us additional information. It's a few free-flowing, open-mike minutes that we have together. We'll have questions back and forth.

We'll start with Ron.

[Ron Reinas]

I just want to follow up on my remarks earlier today. In terms of some of the questions that the committee was asking, one thing I noticed is that there needs to be a recognition that a border is a two-way street, meaning that while this committee is focused on things that happen in Canada, we as an international border operator, with five board members appointed by the Government of Canada and five members appointed by New York State, are the landlords for CBP and CBSA.

We are currently working diligently with Customs and Border Protection to move some of their customs operations from the U.S. side over to Canada under the pre-clearance agreement. However, we are not moving personnel, because notwithstanding what the pre-clearance agreement talks about, at the land border it's very clear that U.S. customs does not have arrest authority or general enforcement authority. It's similar to the airports, except that at the airports they turn people over to the RCMP. That is not acceptable at the land border, because when you're dealing with cars and trucks loaded with things, CBP needs to have full enforcement authority.

What we're working on is having all of the elements of what we call preinspection: licence plate readers, facial recognition to match, the biometrics to match with a FAST card, the x-ray inspection for trucks. All of that is to be located in Canada, so we are working with CBP because we control lands on both sides of the border. What we're looking for from the Government of Canada is to make sure that we have the proper legislative authority to do what we're doing. We believe we do have that under the pre-clearance agreement, but there are certain elements on which we're going to need help.

For example, what customs is looking for as a standard operating procedure, both on the Mexican border and on the northern border, is non-intrusive, drive-through inspection, which means a truck can drive through an x-ray facility where the radiation dose for the cab is very low, like 1/400th of a dental x-ray, and then the full power comes on for the trailer.

We would do all of that in Canada, except the guidelines in Canada do not allow for that type of inspection. It's a technical detail, but it would make a tremendous difference as to how the border operates.

It's important that the transport committee and CBSA, public safety and other federal entities understand that legislation in Canada needs to be sensitive to how a border operates, because that affects Canadian exports going to the U.S.

[The Chair, Liberal, Judy Sgro]

Okay, thank you very much.

Matt, you have a comment.

[Matt Jeneroux]

Madam Chair, I'd ask for a short pause here, if you don't mind. We know Ron, who had a good presentation today, but would you mind just taking a few minutes to introduce everybody else, or give them five seconds each to introduce themselves before we hear from them? Is that all right?

[The Chair, Liberal, Judy Sgro]

Yes.

Gary, please introduce yourself and tell us whom you represent.