Transport Committee on May 4th, 2016

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

Okay. Thank you.

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

Madam Chair, I see that time is passing quickly, and you know that there's a vote at 5:45 p.m.

A lot of people in the room want to be heard. Could you please tell me how the time will be allocated? Are we going to ask the people to come back and meet with us again? We have only 15 minutes left to hear from three union groups, which will be a bit difficult. I sincerely hope that we will have the time to hear from them. I would like to know what the committee's opinion is on this. Time is passing quickly. I would still like to take advantage of having the Air Canada representatives here, but there is also the fact that a lot of people have travelled to meet with us.

I would like to know what will happen, Madam Chair.

[The Chair, Liberal, Judy Sgro]

We had already planned to stay late this evening to make sure everyone who wants to speak to this issue gets a chance to speak to it.

If we can finish with Air Canada, with you, and one more round here, then we can go to the House. The vote is at 6:15, so with the committee's permission, we could leave here at ten to six.

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

The vote is at—

[The Chair, Liberal, Judy Sgro]

We have a lot of people here, and our intention was to stay late. We can go and vote and come back. This way everybody has a chance to be heard, and I think that's why they're all here.

As chair, I certainly have no intention of cutting them off. I think we should continue with the meeting. They're willing to be patient, so we can go and vote and then come back and take care of both things.

We can continue now.

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

Fine.

At the last meeting, we talked about several dates relating to meetings between Air Canada representatives and the federal government.

Have any of you attended these meetings with the government since October 15?

[Kevin Howlette]

I did not.

[Calin Rovinescu]

I attended a few meetings with government representatives.

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

Mr. Rheault, could you tell me if the government's intention to pass a bill that would repeal Air Canada's obligation of maintaining the centres as they existed before the introduction of Bill C-10 was addressed during those meetings?

[David Rheault]

Could you please repeat the question?

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

Was the government's intention to introduce a bill like Bill C-10 to enable Air Canada to be discharged from proceedings addressed during one of those meetings?

[David Rheault]

Air Canada shared its recommendations with the government. They are in the report that we submitted to the committee and that was drafted by Mr. Emerson. Obviously, various issues were discussed at the meetings, but the issue of Air Canada's competitiveness and what we call the

level playing field,

namely, Air Canada's ability to compete on a level playing field was raised during some meetings.

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

Did you ask the government to act quickly to ensure that Air Canada could be more competitive?

[David Rheault]

Obviously, it is the government that determines the legislative aspect, but we think the dispute resolution with the province of Manitoba and of Quebec makes it possible—

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

Mr. Rheault, I'm going to stop you there. I don't want to know what happens, but what you discussed. I want to know if, following agreements with the two provinces, you asked the government to speed up the process to pass Bill C-10.

[David Rheault]

For the regulations to come into force, clearly the amendment must be made. It allows Air Canada to be sheltered from legal action. In addition, having a

level playing field

and legislation recognizing that our disputes with Quebec and Manitoba have been settled is important. We notified the federal government of our discussions with the provincial government once the disputes were settled.

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

The Government of Quebec says that the agreement has not yet been reached. It has also issued a press release asking the federal government not to rush with Bill C-10 until the agreements have been completed.

Could you tell me what is happening? On the one hand, the Government of Quebec is telling us that the agreement has not been reached, and on the other hand, you are telling us that it has. You have not completely answered my question, so I am asking you for clarifications. Have you asked the government to move quickly?

Yet there is no agreement. As parliamentarians, we are having a hard time understanding what is happening exactly.

[David Rheault]

To answer your question, let me emphasize that there is an agreement in principle with the Government of Quebec. On February 16 or 17, after the litigation was settled and Air Canada made the commitment to buy up to 75 C-Series aircraft and to service them in Quebec, of course, for 20 years, the Government of Quebec and Air Canada made a joint announcement that they had agreed to drop the legal proceedings.

Now, for the agreement to be implemented, we must finalize it to secure the purchase of the aircraft, which will help materialize and implement our commitment to servicing them in Quebec and creating a centre of excellence.

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

Thank you. That is all the time I have.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'd like to make a point, and of course ask a question, or possibly ask for some more information.

The point goes back to my other question with respect to Air Canada and your intention to keep jobs. I don't want to say create jobs, because you reaffirmed that you're looking at keeping jobs in Ontario. It would be much appreciated if you can have a formal response to that effect, that in fact recognizes the expected jobs that would be in Ontario moving forward.

[Kevin Howlette]

Right now, as I said, the majority of our line maintenance jobs are, today, in Ontario. It just stands to reason, sir, that given the size of our operation.... Our operation in Toronto is our global hub. There is not one fleet type within the network that does not pass through Toronto at some point in the day, so it will always be within the Air Canada system—

[Vance Badawey, Liberal, Niagara Centre, ON]

Once again, if I can have that formalized, I would appreciate it, through correspondence or whatever way you want to formalize that. If I can have something that states that, I would appreciate it.

The second point, Madam Chair, is with respect to tenders. I'm going to drill a bit deeper on the questions that were asked about what will keep jobs in Canada. I do really appreciate the answers we're getting back with respect to different types of aircraft, etc., but let's get to the business side of it, which is that you obviously have an asset management plan. That asset management plan identifies the life cycle on your assets. Your maintenance plan's attached to that, and obviously, down the road, there is replacement after a certain period of time.

I think what we're looking for ultimately, gentlemen, is in the tendering processes you've gone through in the last year or two. It's whether, within your asset management plan, we can in fact get a net difference in terms of the costs that were attributed to that plan in Canada compared to the costs for being outsourced. It doesn't have to be specific to aircraft and it doesn't have to be specific to parts. It's just your overall asset management plan for the assets you have for your fleet.

Once again, it doesn't have to be specific. It's just a total, a total with the tenders that you released, and obviously, as you mentioned earlier, you sourced globally.

What's the bottom line, gentlemen? What's the bottom line in terms of what you sourced globally within your asset management plan? What was actually kept here in Canada, what was outsourced, and what was the difference in that cost?

[Kevin Howlette]

The regional fleet is maintained here in Canada, number one.

Number two, the narrow-bodied fleet is maintained primarily in the U.S. As for the wide-bodied fleet, sir, some is done in Asia and some in Israel.

Now, to try to apply a percentage of it, in the case of the regional fleet, I don't know what percentage the regional fleet would be of our total fleet. The Embraers are done in Trois-Rivières, so I would say it's probably 75% to 80% of our fleet.

[Vance Badawey, Liberal, Niagara Centre, ON]

Let's drill down a bit deeper now. In the case of your narrow-bodied fleet, which went to the U.S., and your wide-bodied fleet, which went to Asia and Israel, you obviously sourced that out through a tendering process to then compare pricing from companies in Canada versus companies for the narrow-bodied in the U.S. and for the wide-bodied for Asia and Israel—