Transport Committee on May 4th, 2016

[The Chair, Liberal, Judy Sgro]

You had—

[The Clerk of the Committee, Mr. Andrew Bartholomew Chaplin]

The trouble is that when he starts the debate on the motion....

[The Chair, Liberal, Judy Sgro]

And he did that right at the beginning.

[The Clerk]

Yes.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Blaikie.

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

With respect to dealing with this at the end of the meeting, I'm not opposed to the idea of dealing with it at the end of the meeting, but I do object to the motion that it be dealt with in camera. If it's the case that families in my hometown of Winnipeg aren't going to get to come and provide testimony and speak to the impact the changes in this bill are going to have on them and on their lives, then I think they'd like to know the reasons why.

I think it's appropriate that substantive motions come before committee. I recognize I'm a visitor on this committee, but I am on other committees where we do deal with substantive motions in public. My understanding is that going in camera with every motion brought to committee was a practice that started under the Conservatives, and it's one I'm glad to see that some committees have chosen not to adopt. I'm disappointed to learn that's not the case here, but perhaps we can change that at the end of the meeting when we come to consideration of the motion.

With that, I'm prepared to have the motion discussed at the end of the meeting, but not in camera if it's the will of the—

[The Chair, Liberal, Judy Sgro]

If I could just make sure we have the record straight, we have had discussions among the Conservatives, the NDP, and the Liberals. We agreed on a witness list and asked all of the witnesses that were there to come and be representatives. Anyone that Ms. Duncan had put forward on the list was invited to come, as well as witnesses for the Conservatives and the Liberals. I'm sorry you feel people from Winnipeg won't get to be here specifically, but had they been specifically on a list, we would have been happy to have accommodated them.

My apologies for interrupting. Finish your time.

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

In terms of questions for the witnesses, thank you for being here.

One of the things I've been trying to get my head around on this issue is where the urgency for this request has come from. My understanding is that in annual reports by Air Canada, for the last couple of years, intense labour costs for maintenance aren't listed as a problem for the company. There's no suggestion the company is in financial trouble because of excessive maintenance costs. Can you give us a sense of why those issues weren't mentioned if this is an urgent problem?

[Kevin Howlette, Senior Vice-President, Regional Market and Government Affairs, Air Canada]

As Calin said, maintenance costs are about 15% of our operating budget, so maintenance is in excess of 1$ billion annually. It is a significant figure. That's number one.

Number two is that fleet renewals and fleet requirements are an ongoing assessment that goes on every day in our industry as the industry changes. For that category of airplane, the opportunity was there. There are a number of manufacturers in that category of airplane, and that's what drove the decision. It was the same thing as the decision around the narrow-body fleet going from Airbus to Boeing, as it was from Airbus to Boeing on the wide-body fleet. It's no different.

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

Is it the position of Air Canada that a company can't commit to doing significant aspects of its overhaul and maintenance in Canada and still be competitive?

[Kevin Howlette]

I think our point is that the best determiner is a competitive environment. We compete on a global scale. That is not to say that some or all of this work won't ultimately be done in Canada, but we have to compete in a global market.

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

There's been a fair bit of speculation about the connection with the C Series order you placed with Bombardier, the timing, and particularly the sense of urgency the government seems to have in getting this bill through Parliament. Is it the case that Air Canada, if this act wasn't moving through Parliament and wasn't moving through Parliament at the pace that it is, would have gone ahead and bought those planes because they're the best planes for your company?

[Kevin Howlette]

As we have said publicly, we like the airplane. We think the C Series is a great airplane. Additionally, from Air Canada's perspective, we are operating on the assumption that the act will be amended pursuant to this process. If that doesn't happen, we will assess the decision at the time.

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

I am curious as to the origin of that assumption. How was it that you came to assume that the act would be changed, as it happens, when you placed that order?

[Kevin Howlette]

How did it...?

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

How did it come to be that the assumption was that the act would change, enabling you to make that order?

[Kevin Howlette]

There were lots of factors that came into play around this whole issue. There is the creation of centres of excellence in Quebec and Manitoba, getting out from under all of the litigation, and the acquisition of the C Series, a Canadian-built airplane. It was all of those things. I don't think there was any one specific issue.

[The Chair, Liberal, Judy Sgro]

Mr. Blaikie, your time is up. Thank you very much.

You have six minutes, Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

To the witnesses, thank you very much for your time this afternoon.

Before it filed for bankruptcy in 2012, Aveos Fleet Performance Inc. reportedly employed on the order of 2,600 personnel, of which there were 1,800 in Montreal, 600 in Manitoba, and 200 in Mississauga. According to the Parliamentary Secretary to the Minister of Transport, at the proposed centre of excellence for aircraft maintenance for the C Series aircraft maintenance work, there are 1,300 jobs expected or proposed in Quebec, while the proposed centre of excellence for aircraft maintenance activities in Manitoba is expected to create 150 jobs.

Does Air Canada intend to make a commitment to create aircraft maintenance jobs in the province of Ontario?

[Kevin Howlette]

Out commitment is to the centre of excellence in Quebec and our centre of excellence in Manitoba. With respect to our operations in Mississauga, it is our global hub, and it is by far our largest operation. I don't know the figure off the top of my head, sir, but I would expect that we probably have 60% of our maintenance people employed in the Mississauga area today .

[Vance Badawey, Liberal, Niagara Centre, ON]

That wasn't my question. My question was with respect to moving forward. Does Air Canada intend to make a commitment in the future to create aircraft maintenance jobs in Ontario? I know what you have there now, but what are you going to have there?

[Kevin Howlette]

The very fact that it is our largest operation in the system means there will be ongoing maintenance jobs in Ontario.

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Chair, with respect to jobs in Canada in general, what would Air Canada require in order to keep maintenance jobs in Canada?

[Kevin Howlette]

That would basically be the capacity to source our work, and to source our work on a free, competitive basis.

[Vance Badawey, Liberal, Niagara Centre, ON]

Okay. Thank you.