Transport Committee on May 4th, 2016

[Serge Cadieux, General Secretary, Fédération des travailleurs et travailleuses du Québec]

Thank you, Madam Chair.

My name is Serge Cadieux and I am the General Secretary of the Fédération des travailleurs et travailleuses du Québec.

The FTQ is a union with 600,000 members in Quebec, more than 20,000 of whom are aerospace employees. They manufacture and maintain aircraft and aircraft components, work as cabin crew members or pilots, or are employed in airports.

The FTQ recently intervened in this area by filing a motion with the Quebec Superior Court against Air Canada regarding the maintenance and overhaul of its aircraft. Our motion requesting an injunction was the only possible way to force Air Canada to comply with its legal obligations and to respect the unanimous decision by the Quebec Court of Appeal.

Now, unexpectedly, the federal government has tabled Bill C-10. That is why we are here before you today. We are here to ask you to choose the jobs and health of the aerospace industry as a whole over this bad Bill C-10.

All of Quebec understands today why Boeing is supported by the U.S. federal government and Airbus by the European governments. The people understand that Bombardier cannot be an international player without strong government support. They understand that aerospace is not an industry like any other. It is strategic. An industrial sector may be strategic for many valid reasons, such as national security, the impact on the economy, or jobs. Canada got it right by supporting its automobile industry.

Similarly, it must be understood that the gradual disappearance of Canadian expertise in heavy maintenance of aircraft is a step backward for a strategic industry, a step backward that will have a negative impact on thousands of workers, whose jobs will be either exported or made precarious. In fact, that is what the real issue is with Bill C-10. By proposing an amendment to sections 1 and 6 of the Air Canada Public Participation Act and repealing the provision requiring Air Canada to maintain operational and overhaul centres in Montreal, Winnipeg and Mississauga, the government is siding with Air Canada, which has already outsourced the 2,600 heavy maintenance jobs at Aveos.

Worse still, by doing so, it is endangering another 2,500 Canadian jobs in the field of aerospace maintenance. To do their job properly, MPs should ask Air Canada where the 2,600 jobs at Aveos went, why they were exported, and if the expertise needed to maintain its fleet of aircraft is available in Canada. The answers to these questions will reveal that the jobs did not go to China or Honduras, but to the United States and Israel, that they were exported to create added value for Air Canada’s shareholders, and that all the expertise needed is available right here in Canada. This Parliament, which is invested with the mission of defending Canada’s public and national interests, can choose either to create and maintain employment for thousands of workers, thereby benefiting the workers, their families and their communities, or to ratify the plans made by Air Canada’s shareholders for their own interests. The public must also know that aircraft maintenance and overhaul operations help maintain an important pool of expertise for the development of the aerospace industry.

Aircraft development and maintenance are related. No one could imagine building cars without having garages to repair them in. The aerospace sector is as important for Quebec as the automobile industry is for Ontario. Montreal is the third largest world aerospace centre after Toulouse and Seattle. More than 41,000 jobs in 235 companies create 2% of Quebec's GDP. The concentration of expertise, the availability of capital and the existence of complementary companies support an exceptional industry cluster that must be protected by public authorities. By allowing the exportation of maintenance jobs, Bill C-10 is weakening one of the links in the industrial chain. We find this government negligence difficult to understand.

In closing, today, we are urging you to give jobs a chance. We believe that we have what it takes to get Canada's aircraft heavy maintenance jobs back. We have the necessary expertise. The aerospace industry needs to keep that expertise, and we can be as competitive as any other country.

There is therefore no need to change the current legislation. This industrial sector provides a safeguard against the exportation of quality jobs. It is also a deliberate choice made by Canadian legislators to protect jobs rather than to kowtow to shareholders. We cannot fault senior management at Air Canada for doing what they need to do to perform as demanded by their shareholders, but we can certainly reproach the government and Parliament for failing to safeguard the interests of the majority.

The will to keep Air Canada's maintenance and overhaul centres in designated cities meets national geopolitical imperatives and safeguards the Canadianness of the company by firmly anchoring it in certain regions of the country.

By enacting Bill C-10, Parliament will be sending the message that growth and wealth, even at the expense of jobs, are more important than jobs and the national geopolitical imperatives and Canadianness mentioned in the original text.

The FTQ thanks the committee for allowing us to appear today.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Cadieux.

Now we have the International Association of Machinists and Aerospace Workers, represented by Mr. Chartrand and Mr. Hospes.

Which one of you would like to speak?

[Fred Hospes, President and Directing General Chairman, District Lodge 140, Richmond, International Association of Machinists and Aerospace Workers in Canada]

We'll both be speaking.

Good evening. My name is Fred Hospes. I'm the president and directing general chairperson of the transportation district 140 of the International Association of Machinists and Aerospace Workers. I am here today with Dave Chartrand. I am the Quebec coordinator.

We thank the committee for this opportunity to appear before you to present our views on Bill C-10.

The IAM is the largest union at Air Canada and represents approximately 8,000 workers. When Air Canada was privatized in 1988 through the Air Canada Public Participation Act, we raised our concerns that Air Canada would move its maintenance and overhaul operations outside of Canada. The Progressive Conservative government of the day responded with legislation requiring Air Canada to maintain operational and overhaul centres in Montreal, Mississauga, and Winnipeg. In addition, the government and Air Canada stated publicly that the act guaranteed that aircraft heavy maintenance overhaul employment would be maintained and even grow in those communities.

Following the Aveos bankruptcy in 2012, the majority of Air Canada's aircraft heavy maintenance overhaul work was done outside of Canada. Make no mistake: we also represent the 2,600 Aveos workers who lost their jobs.

We have serious concerns with the introduction of Bill C-10. In particular, proposed subsection 6(4) of the act explicitly allows Air Canada to “change the type or volume of any or all of” its aircraft maintenance work “as well as the level of employment”.

[David Chartrand]

Good afternoon, and thank you.

My name is David Chartrand, Quebec coordinator for the International Association of Machinists and Aerospace Workers in Canada.

As my colleague said earlier, we have serious concerns with the introduction of Bill C-10. In particular, clause 2 explicitly allows Air Canada to change the type or volume of any or all of its activities in each of the provinces, as well as the level of employment in any or all of its activities. The fact that the Liberal government has brought this bill forward with no public consultation, in an obvious attempt to render irrelevant the recent Quebec court decisions, is particularly troubling.

The Liberals are now trying to fast-track Bill C-10. Bill C-10 will simply allow Air Canada to move all of its maintenance and overall work abroad. It will undermine the entire aviation maintenance and aerospace sector in this country, thus putting at risk thousands of good-paying, high-skilled, high-tech jobs that could provide employment for Canadians for decades to come.

The current version of this bill is too vague. It takes away any leverage that any government currently has to maintain Canadian jobs in this industry. With the current legislation, Air Canada profits were $53 million in 2012, $350 million in 2013, $531 million in 2014, $1.22 billion in 2015, and in the first quarter of 2016, profits were $101 million.

This bill allows Air Canada to focus on a race to the bottom, not protecting jobs in an industry for future Canadians.

[Fred Hospes]

This bill allows Air Canada to focus on a race to the bottom and not on protecting jobs in the industry for future Canadians. This bill makes us wonder whether the government has given up on the aviation sector in Canada. We wonder if the government has given up on good jobs this sector can provide across the country. We wonder if corporate profits have become more important than good jobs to this government.

We urge this committee to send Bill C-10 back to the House with the following recommendations.

One, we recommend that the proposed new subsection 6(4) on maintenance activities be removed, and two, we ask that the jobs and this industry be maintained in Canada and that the government continue to invest in and support the MRO industry in Canada.

In conclusion, we ask that this committee put forward and support these recommendations.

[David Chartrand]

We urge this committee to send Bill C-10 back to the House with the following recommendations:

Remove the new subsection (4) pertaining to maintenance activities. We ask that the jobs and this industry be maintained in Canada and that the government continue to invest in and support the maintenance, repair and overhaul industry in Canada.

In conclusion, we ask this committee to put forward and support these recommendations.

[The Chair, Liberal, Judy Sgro]

Thank you very much. We appreciate that very much.

Seeing our time here is quarter to six, is it the pleasure of the committee to stay for another six or seven minutes?

Ms. Block, you're the first up. Would you like to do your questions now?

[Vance Badawey, Liberal, Niagara Centre, ON]

The light's gone on. We have to go.

[The Chair, Liberal, Judy Sgro]

We could stay an extra six or seven minutes if the committee wanted to. Is that the choice of the committee?

Ms. Block, would you like to start? We have enough time for one of our questioners, if you want. Otherwise, we can do it later.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Madam Chair and committee, for agreeing to get one round in before we have to go.

I also want to thank our witnesses for being here today. I know it is beyond our control that we have to leave, but I thank you for your patience as we work through the motions in the House.

My first question—any of you can answer this, and I think all of you should—is whether any of you have met with Minister Garneau or his parliamentary secretary, either before or since this legislation was introduced, to discuss the implications of this bill.

[David Chartrand]

I would like to answer that.

On a number of occasions, since the minute the Liberal government was elected, we have sent letters and started trying to communicate with Minister Garneau, and we also sent 90 letters to different MPs explaining to them that it was important for us to meet with them because we saw this coming. We told them that legislation would be pushed through, that they would try to change this act, and that they would try to give this leeway to Air Canada.

So we started a long time ago doing this lobbying, trying to make the government understand that these jobs were important to us. Not only did we do that, but on the occasion of the certification of the Bombardier C Series airplane, since we also represent the members at Bombardier, when he was there to give the certification to the airplane, we tried to get in contact with him. I was able to have a few minutes with him and I asked him to have future discussions concerning this, and he said there wasn't an issue and that I would be able to. He never got back to us on it.

I'm also vice-president of the Quebec Federation of Labour, and on a number of occasions the Quebec Federation of Labour has asked to meet with Minister Garneau. He has been unable to every time. A week ago we got a meeting with his chief of staff, but we were never able to have a real discussion with Minister Garneau.

[Serge Cadieux]

The same is true for us in the FTQ.

We asked Mr. Garneau's office three times whether he could meet with us, either in his constituency or here in Ottawa. He has never had the time to meet with us. We stressed the importance of this industry to Quebec. Since he is a member from Quebec, himself, he should pay particular attention to this matter, especially since he made public comments at the time of the Aveos closing. He condemned the Conservative government for not complying with the Air Canada Public Participation Act. We have had only one meeting with his chief of staff, who simply listened to us. Unfortunately, he did not answer the questions we put to him.

[Jean Poirier]

Gilbert McMullen, Mario Longo, and I had an opportunity to meet with Mr. Garneau at the end of November. We spent an hour with him. He told us clearly that the matter was before the courts at that time and he definitely remembered that he had supported us in 2012. We even gave him the statements by MPs Marlene Jennings and Stéphane Dion and by Justin Trudeau, the present prime minister. We were pleased that a Liberal government had been elected, a government that accepted this fact and that supported us at the time. Then, given that he had just taken office, he simply told us that the matter was before the courts and he was going to wait to see whether Air Canada would take the case to the Supreme Court. He told us that he would communicate with us about that. We were very happy with the meeting when we left. At least people were going to be looking after things. After that, the door was simply closed. We requested further meetings, but they never materialized.

Today, we are here before you and we are looking at a bill that should not exist. The law is clear. We have won twice, in the Superior Court and the Court of Appeal. There was a unanimous judgment of five judges. There are 400 aircraft outside the country.

We are in proactive mode. We want to make a plan with you, the government of Quebec, and Air Canada so this matter can be resolved to everyone's satisfaction, in the interests of the Quebec and Canadian economy.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

Some of you may have been surprised, then, when this was the first piece of legislation that Minister Garneau introduced. Maybe others of you had seen it coming.

I want to move to another question. Given your serious concerns with subclause 1(2), where it reads that there's the ability to “change the type or volume of any or all” of its maintenance activities, what do you believe the intent and the outcome of this bill will be?

[Fred Hospes]

The issue we have with this particular section, if you read it, is that the corporation “may” eliminate those activities in those provinces and change the type or the volume of any and all activities in each of those provinces, as well as the level of employment.

The word “may” is one of the issues. As a representative of members at Air Canada, I can tell you that these types of words have a different meaning from what some of us would think those words mean. I've been at the negotiating table with Air Canada on many occasions. They will use those types of words, and there will be no guarantees that even the excellence centres that they speak about will be around, because they may do it or they may not do it.

That is a big issue with us, the word “may”. It should be that they “shall.”

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mrs. Block; your time is up.

Given where we're going, I think we should suspend the meeting at this particular time.

Gentlemen, I would ask that you please stay. We will be back. The committee has a lot of questions, and we would appreciate your remaining. Our apologies for the time constraints.

I will suspend the meeting at this time.

[The Chair, Liberal, Judy Sgro]

I am calling the meeting back to order.

Thank you all for waiting.

Thank you to my colleagues for their endurance and for coming back so that we can continue to ensure that we get a fair hearing.

We are going now to Mr. Hardie.

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

Thank you, Madam Chair.

I am sure the machinists visited me in my office. My goodness, I think it was just yesterday or perhaps the day before, probably in anticipation of this meeting.

When we talk about good-paying jobs, jobs that are sustainable and support families, there are two partners in this: you and the company you are working with.

My question to you gentlemen is this: where are your companies? Why aren't they here to tell the story of the business they could do or the business they want to do?

[David Chartrand]

In my mind, any company that could obtain a contract with Air Canada would not be seen very well coming here and talking against what Air Canada wants to do. Air Canada wants this bill to go through, and I don't believe that any employer who wishes to obtain work would be comfortable coming here and talking against the will of the employer who could give them those contracts. For us, it's as simple as that.

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

What is your assessment, then, of the competitiveness of the companies that remained after Aveos went down?

[David Chartrand]

My assessment is that we can be competitive in Canada. I did not hear anybody say the contrary to that, even in the testimony of the two people who were here before us. Nobody said we cannot be competitive. That's number one.

Number two, they were saying that maintenance costs represent 15%. In that 15%, you include everything that is done. Of the price of a plane ticket, 50% is taxes, administration fees, and all kinds of other fees. It represents a small portion of those huge profits that you saw earlier today.

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

The question then becomes, in your view, why isn't Air Canada choosing to do more of its heavy maintenance with the existing companies and the existing workers here in Canada?

[Jean Poirier]

If I could comment, Madam Chair, I would say this.

Mr. Hardie, if you want to talk about competitiveness, let's do that.

In 2007, when Air Canada Technical Services was sold, Air Canada was profitable. It was sold for over $925 billion to two consortiums: KKR and Sageview Capital, former managers of Nortel Networks Corporation. I was there. I was working in the hangars with the workers who are here today.

Management did not succeed in retaining those services. Why? Because of bad moves they made, such as taking over the Nortel Networks buildings, which cost several tens of millions of dollars and was a flop in terms of computer systems.

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

With respect, sir, I don't wish to cut you short. I just needed to get a sense of that answer.

There are companies still in the business of heavy maintenance today. Why is Air Canada not choosing to do business with them?

[Fred Hospes]

I would like to respond.

There are two corporations that we currently represent. We represent workers at A J Walter, which was a subsidiary that was sold off from Aveos during the bankruptcy, and we also represent Lockheed Martin. We just came through negotiations with both of these corporations.

A J Walter operates here in Canada and actually had a small profit this year. Although Lockheed Martin didn't have profits, they are competitive, and they can compete here in Canada on engine work.