Transport Committee on Sept. 24th, 2018

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

Yes, the business folks I talked to in Alberta definitely expressed concern about the structure of our airport authorities, how they are structured and maybe not having enough input into who's on the airport authorities. Is that something you might suggest we take a look at?

[Andy Gibbons]

I would suggest you take a look at it. The comparison we like to make, Mr. Liepert, is that there is a Canada Marine Act that governs port authorities. There are elements of that act with respect to governance and with respect to appeal mechanisms. Nav Canada has an appeal mechanism in charging principles. Mr. Emerson found in his report that perhaps there are some areas to improve with regard to airport authorities and their governance.

You know, Canada's airports have had a lot of success. We have really quality infrastructure in this country. It's a success story. I don't want to denigrate the work of airport authorities. But when it comes to how shared public assets should be governed, or what's a reasonable burden and whether or not users should have an appeal mechanism, I think those are conversations that we definitely want to have.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Jeneroux, you have two minutes.

[Matt Jeneroux]

Toronto Pearson is the largest cargo airport in the country, although I understand that Hamilton is not too far behind in the amount of domestic and foreign transportation of goods. Is there added capacity on the cargo side to be able to expand in Hamilton? What hurdles to doing that would be in your way?

[Cathie Puckering]

Hamilton is actually the largest dedicated overnight express cargo airport in Canada. We're currently third or fourth in Canada when it comes to overall general cargo that's moving. We don't move cargo in the bellies of passenger aircraft. All of the dedicated cargo operators in Canada, with the exception of one, are actually based in Hamilton. Cargojet is our largest overnight express cargo, moving about 80% of the traffic today into Canada, the U.S., and global countries in the Caribbean and southern destinations—

[Matt Jeneroux]

Do they serve Asia as well?

[Cathie Puckering]

They're not currently serving anything in Asia. Their growth plans are looking into that. They have 55 interline and codeshare agreements with other carriers around the world, so they may be point-to-point delivering something into the U.K. and then maybe connecting directly into Asia from that point.

When it comes to capacity, Hamilton is a 24-7 operation and we do not have any curfews. We have infrastructure that will support all the wide-body aircraft that we're currently seeing, which is supporting the growth in the goods that are moving through the airport. We definitely have capacity to grow. The effects of the increased activity of the cargo are putting some pressure on our infrastructure. We're looking at maintaining that, but we're able to complement the passenger activity by cargo, usually flying anywhere from 10 o'clock at night until DHL arrives as the last flight in the morning at about 6 o'clock.

The growth potential is huge. There's connectivity, though, once it comes into our airport or when it arrives at the airport using the highway system. That's where there could be some constraints in the future, in enabling our operators and our partners to actually sustain the growth plans they have. We can only focus on the infrastructure at the airport, to make sure it's safe and efficient for those quick turns. Maybe down the road, the challenge will be how quickly those goods can come to the airport and leave the airport for their intended destinations.

[Matt Jeneroux]

Are you seeing an increase in night flights?

[Cathie Puckering]

We're seeing an increase in day flights and night flights, with the growth in both passenger and cargo activity. We have capacity to deal with much more at the airport with the right infrastructure in place. We're not constrained today, by any means, with the amount of product that's moving through. Obviously, with online shopping, we are seeing that e-commerce is generating a lot of the increases in goods. The area we are in—the region, the innovation corridor with advanced manufacturing—is creating that demand.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Badawey, go ahead.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Chair.

I have a quick question for Mr. Gibbons. When are you guys going to start flying out of Hamilton to Ottawa? I'll even sit on boxes if I have to.

[Andy Gibbons]

Well, as a resident of Ottawa, I would appreciate it as much as you would. It gets asked a lot, so stay tuned.

[Vance Badawey, Liberal, Niagara Centre, ON]

Hopefully, yes.

Ms. Puckering, you spoke a lot—and we spoke a lot today—about infrastructure: bricks and mortar, working together, operational strategies, etc. One of the things I've noticed in the past, especially in the food industry and now in this industry, with freight, automation and different terminals, is the need for traceability and the advantage of traceability.

Mr. Nohara spoke earlier about technology. Where do you see technology adding to more efficient traceability being part of a strategic direction for us to take in the future when we look at our trade corridor? When we look at the integration of distribution logistics in a bigger picture nationally, and then therefore internationally, where do you see technology allowing us to perform and be strengthened with respect to our global performance in trade? Where do you see that playing into the overall strategy?

[Cathie Puckering]

The significant improvements by all of our cargo partners are seeing the need to increase the amount of technology they actually have to operate their businesses. Most of our carriers, such as DHL, UPS and Cargojet—Cargojet is also handling all the goods for Canada Post, Purolator, Amazon and some Air Canada cargo—are heavily reliant on their operation centres and connectivity into the Internet for the timely movement of goods. Today, you're seeing the ability to track those goods with hand-held devices. All of that is creating a need to fundamentally change the way those goods are actually moved through their facilities and through the airport.

One of our partners has actually had some huge success, with full integration of CBSA directly into its facility. As the goods are arriving—actually before they arrive—they've already randomly decided which ones need to be rescreened and they're able to choose a different direction through the sort process so that it's a timely inspection and there are minimal delays getting to the final consumer.

[Vance Badawey, Liberal, Niagara Centre, ON]

Do you find that it is not only advantageous with respect to our location and the incentive programs we have in place—the assets we have in place all being multimodal—but also with respect to its ability to integrate, not just technology within different sectors but also the intermodal connectivity, as you mentioned earlier, with respect to that technology?

[Cathie Puckering]

One of the interesting observations we have been discussing recently is about aerospace manufacturing.

We have two firms that are very interested in locating in Hamilton, and connecting to that supply chain is absolutely key for them. They were very intrigued and interested in the prospect of Hamilton not only being served by an airport and a road system, but having the connectivity into rail and the port authority.

Part of their analysis is actually looking at other ways to move their goods. Their completed projects could be items such as fuselages and wings, which are large, and ways would need to be found to transport them from their manufacturing site to their final destinations. Hamilton is definitely on the radar for having all of those key linkages and will be part of the final decision.

[Vance Badawey, Liberal, Niagara Centre, ON]

Toronto Pearson has nearly 445,000 tonnes, Vancouver nearly 286,000 tonnes, and Hamilton more than 99,000 tonnes. That places you quite high—I'm assuming third or fourth in the nation with respect to tonnage.

[Cathie Puckering]

Montreal sneaked in there as number three in 2017. We were number three until that time, yes.

[Vance Badawey, Liberal, Niagara Centre, ON]

That said, I guess the obvious question is how we can help you bring that number up.

Are you seeing the trend changing, especially with e-commerce in our region, southwestern Ontario? What more can we do to help facilitate that change, not just for Hamilton airport but also including the other methods of transportation?

[Cathie Puckering]

The ground network is very key. We have a cargo centre, a common-use facility, that helps enable the movement of goods through the airport. There are times when goods don't even travel by air. They arrive at the airport; they may get sorted and then they go back out on a truck headed somewhere else.

We mentioned the congestion on the roadways. We hear every day, from DHL specifically, that minutes matter. They do have serious concerns, with forecast population growth and existing congestion, about where that's going to be in the future. They ask those questions, and they're looking for answers when they're making decisions to build their facilities.

Currently, two of our cargo operators are looking to expand. One is very concerned about our area with respect to its connectivity into the mid-peninsula highway, as well as around the 400-series highways.

[Vance Badawey, Liberal, Niagara Centre, ON]

Are they international? They're not just national. They're going over the border.

[Cathie Puckering]

They connect internationally, into Hamilton out of Cincinnati in the U.S. It's a very critical decision, and it could mean that Pearson airport is a better choice or perhaps their global strategy won't take off.

It is a decision that will be made in Germany about choosing a global gateway megahub for the movement of goods and cargo to meet its future demand.

[The Chair, Liberal, Judy Sgro]

Mr. Aubin, you have the floor.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

Welcome to both of you. You are our last witnesses of the day, but I can tell you that you are no less interesting.

Mr. Gibbons, I'm going to start with you, because you very quickly mentioned a problem that I would like you to elaborate on. I am talking about the cost structure between Canada and the United States. It seems that the differences are significant and that this is not necessarily to our advantage.

[Andy Gibbons]

Thank you for the question. I will answer in English.