Transport Committee on Sept. 26th, 2018

[Matt Jeneroux]

Okay, perfect.

Mr. Bruno, you mentioned that you don't receive any federal funding. You wouldn't get it, necessarily, for the airport, but you'd receive it in, say, green funding, infrastructure funding, with the expansion of the rail line you have there. There must still be tie-ins federally.

[Gerry Bruno]

I'll respond through the chair. We do not receive any funding at all. We haven't applied for, we don't believe we are eligible for, any of these funds under the green program. With respect, I think you're talking about the Canada Line that connects to the airport. That is a private-public partnership, and the airport invested $300 million into building that line to cover the cost of the airport portion and the stations on the airport. The rest was funded by the provincial government and the federal government, but it's for the portion that went downtown. The portion on the airport we actually funded ourselves.

[Matt Jeneroux]

Then the Destination Canada funding, though, is federal funding—the Destination Canada program.

[Gerry Bruno]

Do you mean for tourism?

[Matt Jeneroux]

Yes. You've signed an MOU. Is there no funding associated with that?

[Gerry Bruno]

Correct. We don't get money; we contribute money to a joint marketing program. We work very closely with all of our tourism partners: Destination Canada, Destination British Columbia—

[Matt Jeneroux]

You spend money to be part of the program.

[Gerry Bruno]

Correct.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie is next.

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

Thank you, Madam Chair. Thank you for being here.

This is a study of the trade corridor. Normally when we think of that, we think of lumber and wheat and Lord knows what else getting to and from the port or going over the land ports. We certainly became more aware of cargo, especially high-value cargo, going through the airports to some of the Asian markets, cherries from the Okanagan being most notable.

It occurs that when we look at trade, as has come up as an issue in the NAFTA negotiations, the trade in services is also quite important. This is, I presume, where the airports come in as key players in the trade corridor. Do you have any sense or any statistics or any notions of business travel versus recreational travel—of course, that's a form of trade as well—and the attractiveness of our facilities in bringing in high-quality skills and people to support the economy? Is there any sense of that?

[Gerry Bruno]

Through the chair, we serve a lot of business travel, obviously. We cater to that. We have quite a mix.

If you look at high-tech industries, service industries that want to locate in major cities, one key thing they look at is the level of air services and the number of destinations that they can get to from the city, which is why we have invested a lot of money in marketing, bringing in new airlines, working closely with partners like Destination Canada, and our airline partners such as Air Canada and WestJet, in terms of promoting passenger traffic. Actually, Air Canada's been very successful in drawing a lot of traffic from the U.S. west coast to fly to Vancouver and connect to Asian cities. We have more mainland Chinese carriers than any other airport in North America or South America or Europe.

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

Given the statistics that you mentioned earlier, that you're getting very close to capacity, it seems there's a similarity with the port of Vancouver. There's a strange gravitational pull making everybody want to go through there when there are other facilities—Abbotsford, notably, and perhaps to a certain degree Victoria—where there's underutilized capacity.

What are the conditions that would shift or even out, for the sake of efficiency, some of the demand from a very concentrated, focused area to a place that does have capacity? What has to happen, Mr. Sidhu?

[Parm Sidhu]

We're seeing a bit of a shift with the capacity that Swoop and WestJet and Flair have added. That's given the Canadians who live in our marketplace more options.

There has been some capacity added and some additional lift to give more options to consumers.

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

What about Victoria?

[Geoff Dickson]

Well, it's the same.

The first comment I would make, though, is that we're not necessarily built for surplus capacity. We tend to design and build our airports just in time; we like to be just ahead of the demand curve.

There are really two things at play. As YVR grows and adds a Sydney non-stop or a Melbourne non-stop, that's been very good for the Victoria business market. It's a quick connection away. It opens up tourism. It opens up trade.

What you will eventually see domestically—those are hub airports, in a way, and the hubs will always continue—is that at certain times of the day in certain markets, you will start to pull off and fly non-stop. You will see increases, I think first in more intra-Canada domestic non-stop flights. Victoria-Montreal was launched for the first time this year with Air Canada. There is increased Toronto frequency, increased prairie frequencies. Then you will start to grow more into the U.S. markets.

I think it will be a while before we see long-haul international. It's probably 10 or 20 years away.

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

We talk a lot in our caucus about rural Internet connectivity. Airline connectivity I think adds something to places like Castlegar or Kamloops or Prince Rupert, etc., as well.

YVR has a wonderful airport. I get to see it a lot more these days than I used to. However, I notice that it has become fairly aggressive at new revenue generation.

Is there a rub with the local community, though? When you do something like the outlet mall in competition with the other local merchants, how do you reconcile that? What's the nature of the relationship exercise you have with the City of Richmond or with some of the other adjacent municipalities?

[Gerry Bruno]

We work very closely with the City of Richmond. I mean, we are a community-based airport. The City of Richmond appoints someone to our board of directors, as does Vancouver, Metro Vancouver, the provincial government, and the federal government.

When we embark on initiatives like that, we do consult. We work very closely with the communities. We don't see it as much as competition as it is an adjunct service to our own passenger base. We have a lot of passengers who come and have a long layover. There is the Canada Line SkyTrain connection, which is free from the terminal to there.

A lot of our own passengers use that shopping centre. It's a high-end outlet mall. There are not a lot of them in the greater Vancouver area. Is there some competition? I guess there is, but—

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mr. Aubin.

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

Thank you, Madam Chair.

Gentlemen, I thank you for being with us.

We have heard several witnesses from port authorities who spoke of their reality. Curiously, when talking about ports, a lot of emphasis is placed on container goods and bulk goods, and there is very little talk of cruise ships. However, when discussing airports, there is a lot of talk about passengers and goods are too often ignored. You presented us with impressive figures.

Mr. Sidhu, I do not even know if goods are handled at your airport. The first thing I would like to know is what percentage of your top line represents goods compared to the transportation of passengers.

[Parm Sidhu]

Through the chair, we have a very small amount of cargo. The only cargo that is moved out of Abbotsford is done through WestJet, and they feed Calgary and Edmonton. There is a very limited amount of cargo. The ratio of cargo to passengers is not even measurable.

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

Okay.

It is still odd, because you have a rare commodity. Everyone is looking for industrial lands for sale across Canada. You seem to have some.

What percentage does that represent for you, Mr. Bruno?

[Gerry Bruno]

There are two things. I want to bring one fact forward that we tend to forget, and it's not highlighted. The ports get a lot of attention because there is a huge volume of cargo traffic, containers, and break-bulk. Globally, air only accounts for 1% of cargo by volume, but over 30% by value. We really punch above our weight class, if you will, and we are forgotten in the cargo world, but we are a big player in cargo. The value is really what counts, not the volume.

Our passenger aircraft, particularly the wide-body aircraft that fly across the Pacific, have a lot of cargo capacity in them. That's where a lot of the perishable and high-value goods are carried, on passenger aircraft. To make an international route profitable and viable, both are important. Without both together, some of those destinations that we have would not exist.

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

Do you anticipate telling me what percentage of the airport's top line represents the transportation of goods compared to the transportation of passengers?

[Gerry Bruno]

For us there is not a lot of revenue or profit on the cargo side, but we see it as a complete package. We don't separate that when we're looking at an aircraft coming in. Basically, the landing fees they pay are for both the cargo and the passenger loads they are carrying. We don't differentiate. We have a lot of land that is used for cargo facilities and warehousing, so we lease the land to the cargo community. That's where we do make a lot of money.

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

Thank you.

Mr. Dickson, you said you are President of an association of smaller airports. Are you talking about only airports on the West Coast or across Canada?