Transport Committee on May 4th, 2016

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

That gets us back to the question.

Why isn't Air Canada doing business with these companies? What is your assessment of that?

[Fred Hospes]

I don't understand why they are not doing business with those companies. I know that they do a very small portion, emergency slides only, with A J Walter.

Over at Lockheed Martin, they do not do any work that I am aware of with Air Canada engines, but they could. They have the capabilities to perform that work.

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

What about Air Canada's competitors, like WestJet or Porter? Are they using these companies, or are they shipping jobs away like Air Canada wants to do?

[Fred Hospes]

I can't speak to that.

[Jean Poirier]

We operate in a competitive sector.

You have a plan at present to respond to this competitiveness. Air Canada published the Wall of Fame of the best maintenance and repair centres in the world, the places where maintenance should be done. We are talking about Lufthansa Technik and Air France-KLM. Those companies are attached to an airline.

Air Canada made a business decision to sell off those activities, and it did that illegally, according to the law. That is one thing. The aircraft hangars are standing empty, in terms of the general maintenance that could be done. Air Canada tripled its prices for Aveos so Aveos would move. The same thing happened for components.

Today, the only thing left to do is resume operations in the hangars near where the planes land. That will answer your question as to why A. J. Walter Aviation and Lockheed Martin do not have contracts. The hub is the hangar. We are talking about a 767 going into a hangar.

I am just trying to answer your question, but you are not letting me finish.

[The Chair, Liberal, Judy Sgro]

Your time is up. We'll try to get that in an answer to someone else's question.

Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you guys for your patience today.

When I met with machinists in Winnipeg and asked if they had been consulted by the federal government before Bill C-10 was tabled, it was a clear no. I think what we've heard from you today was a clear no. We had the minister here on Tuesday. He said that he didn't talk to Air Canada about this before presenting the bill. Today we heard Air Canada resist saying that they had meaningful exchanges with the government on Bill C-10. It's a significant decision for the aerospace industry in Canada, yet there seems to have been no consultation.

Can you guys speak to what this means with respect to the government's ability to leverage getting that kind of work here in Canada in the future?

[Fred Hospes]

None of the deals that Air Canada speaks about with regard to the centres of excellence are signed. When they speak about a centre of excellence in Winnipeg, I have concerns, because the type of work in Winnipeg is not the same as what they were performing there prior to Aveos' ceasing operations.

The work they're talking about there is with Hope Aero Propeller. We don't know what they're going to be doing with Hope Aero Propellor in that hangar. They're talking about Airbase, meaning low-skilled jobs. They're not the same high-tech jobs that we had when they were overhauling aircraft. It's basically doing galley repairs. As for Cargojet, we don't have a clue about what they intend to do with that. Nobody has had any discussions, whether it's Air Canada, the Winnipeg government, or the federal government.

[David Chartrand]

I'd like to address that question as well. You have a company that says it will work to create a centre of excellence. If they can't be competitive in maintenance here, why would they do that? That's the question you have to ask yourself. They're saying that they're going to create a centre of excellence here, and if it's competitive, it will get the work. Those were the exact words that were used: “if it is competitive”.

So it must be competitive if they're going to create a centre of excellence to repair, maintain, and overhaul the C Series airplane. We are competitive. Everything is in U.S. dollars. Workers here are paid in Canadian dollars, so they have a 20% advantage right off the bat. I don't see why they would make a centre of excellence here if it wasn't competitive, or why they would even think about it.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In spite of the fact that the government maintains that there is no deal with Air Canada, no deal with Bombardier, I think it's fair to say from the minister's testimony the other day that the government wants to claim some responsibility for the jobs that are going to be created out of these centres of excellence, even though the government denies that there's any deal. We're meant to understand that this is great for workers, that we should all be happy and cheerlead this deal.

Losing this legislation and not being able to pursue the case that was being pursued in the courts, not being able to take it to the Supreme Court for what would likely be a victory—what does that mean to workers in Canada?

[David Chartrand]

It means that we have to go on good faith with a company that for four years did not respect the law, and that we have no signatures. It was said here today that there are no signatures. It was said that there is a possibility of 1,300 jobs. For me, I have an issue with the possibility of 1,300 jobs when the law says we should have 2,600 jobs here and that law is not being respected.

I would like that, if it's going to exist, to be in the bill that you're presenting. Why, if it's going to create jobs.... It doesn't say in there that it's going to create jobs. Why doesn't it say in the bill that there are going to be 1,300 jobs? If there is one thing that is clear right now with the current law—and it was interpreted by two courts—it is that those jobs should be here. The only thing this will do is not clarify the act. It's going to make it clear that the work can stay outside of Canada and that we can send more out. That's the only clarification that this is going to bring.

[Fred Hospes]

I would like to add to that, if I may.

To your question about this bill, you'll see that any of the work they're talking about is not Air Canada work, whether it's in Quebec or whether it's in Montreal. On the work that Air Canada testified to here earlier today, none of it is Air Canada work.

[Jean Poirier]

On the question of centres of excellence, they have to stop throwing up smokescreens. In Manitoba, Air Canada is going to lease hangars that it will then rent to Cargojet. That is somewhat like renting our hangars in Montreal to Air Inuit. It does not mean anything. Let's stop talking about a centre of excellence in Winnipeg. It is not one.

And then there is talk of jobs in Montreal, but when will that be? In 2019? We will have new planes then, and in 2025, there may be another change to the legislation. If Air Canada was unable to abide by the law that governs it, do you think it will honour a contract? The company does not want to be involved in maintenance.

We were talking about competitiveness a minute ago. I am going to give you some figures about that.

These days, maintenance on a Boeing 767, which takes 30 days, costs $1.3 million. We are not talking about specialized equipment here, we are talking about the workforce. It takes a team of 80 people to do the checks on a 767, lasting 30 days. That will bring in $1.3 million for the company that does it. If we do a quick calculation, that represents an annual cost per worker of $195,000. If we take instead a wage of $60,000 per year, at $30 per hour...

[The Chair, Liberal, Judy Sgro]

Sorry, sir, I have to... My apologies. I have to interrupt—

[Jean Poirier]

Madam Chair, I never manage to finish a sentence.

[The Chair, Liberal, Judy Sgro]

My apologies. I have to interrupt. I tried to give you enough time to get your point out there, but maybe you can tag it on to one of the answers to one of the other members.

Mr. Sikand.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you. I'll be splitting my time.

Gentlemen, thank you for being here today and expressing your concerns.

I heard what you had to say about the billion-dollar profit and I apologize if you think this question is ignorant, but could you indulge me in a hypothetical? If Air Canada couldn't succeed as a company for whatever reason, such as perhaps not being competitive, could you speak to that? What position would that perhaps leave you in?

[Jean Poirier]

It is not accurate to say that Air Canada was not competitive in general maintenance and overhaul. I can give you copies of all the press releases about the profits made with the sale of Air Canada Technical Services. We are talking about $1 billion. This company was profitable.

You have a plan in front of you now, and it would be worth talking about it. We want to start the company back up, but we need your help. We need the Government of Canada. I am not even talking about money. I am simply talking about getting the hangars back and letting us go back to work. We want to start up a project. I am surrounded by professionals who support me. If the governments of Canada and Quebec decide to support us, we are going to make it happen.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

I'm sorry to cut you off. I didn't mean if they weren't competitive in maintenance. Let's suppose they are, and that due to other factors the company doesn't survive. What would be your possible course of action? What would be your next steps if Air Canada—

[Serge Cadieux]

It is important to know that over the last ten years, Air Canada has already asked its employees twice to make sacrifices. It has sought protection under the Companies' Creditors Arrangement Act. The workers made sacrifices when the pension plans were reopened. Air Canada's subsidiaries negotiated dual wage scales. The wages being paid now to new employees at Air Canada, Air Canada rouge and Jazz Air are much lower than the former employees' wages.

What is at stake now, and what you need to know, is that we have lost 2,600 jobs in Canada because Air Canada decided, as I said earlier, to send jobs offshore, not to China, but to the United States. The American workers are not paid less than Canadian workers. Labour is not less expensive.

Earlier, the Air Canada representative refused to answer questions you asked him, including the question of whether the company was prepared to guarantee that the 2,400 maintenance jobs located here are going to stay here. The answer is not yes, because if the bill is passed, there will be no more maintenance jobs at Air Canada in two years. An Air Canada employee will just have to check the tires in order for the requirements in Bill C-10 to be considered to have been met.

You need to be aware of this. You are elected by Canadians so they can continue to support their families, but you are agreeing to export well-paid jobs abroad. In fact, they are not all that well paid. We have to look at things in context.

Why, in 1988, when Air Canada was privatized, did parliamentarians ask for guarantees that jobs would be preserved in Canada? Things have not changed. The other global carriers subsidize their aerospace industries. They are partners, because they want the good jobs to stay in the country.

Why is Canada not doing the same thing?

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you for that. It's because I'm sharing my time with my colleagues.

[The Chair, Liberal, Judy Sgro]

Mr. Iacono.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Madam Chair.

Thank you for being with us today, gentlemen.

I am going to ask you a very direct and very simple question. In your answer, I would like you not to reiterate what you have already said, including about job losses.

Given that Air Canada is a private sector company, why should it operate on different terms from those that apply to its competitors, for example, WestJet?

[Gilbert Mc Mullen, President, Association des anciens travailleurs des centres de révision d'air Canada]

Before being privatized, Air Canada had always been considered to be the national carrier. An illustration of this is that, whenever there is a labour dispute, Air Canada is the only company that gets special legislation from the government to make the employees go back to work. We can say that it is considered to be an essential service. When the company was privatized in 1988, obligations were imposed.

It is very important for the economy that these jobs stay here. I'm sorry, but I have lost my train of thought somewhat.

[Serge Cadieux]

I would like to add that, in 2008, during the automotive crisis, the government decided to invest $13.9 billion in General Motors. And yet General Motors is not a public enterprise. It is a private company. Why was that done? Because the government wanted to keep those jobs in Canada. All governments do that. If you do not see things that way, it comes down to saying that all of the jobs in Canada can be sent offshore because the job can be done in China for $1 an hour. That is not an economic system.