I will deliver my remarks in French, if you don't mind.
First of all, we would like to thank the committee for allowing us to speak to you today about the importance of modernizing the Act to amend the Air Canada Public Participation Act through Bill C-10.
My name is Yves-Thomas Dorval and I am the chief executive officer of the Quebec Employers' Council or QEC. I am accompanied by Mr. Benjamin Laplatte, principal director, Public Affairs and Corporate Development.
For close to 50 years, the QEC has represented the majority of industry associations, and Quebec's largest employers. Directly or indirectly, it represents the interests of more than 70,000 employers of all sizes, in both the private and parapublic sectors, some of which are Canada-wide, if not international, enterprises.
The mission of our organization is to see to it that in a context of increasing global competition, businesses benefit from the best possible conditions to prosper in a sustainable way, that is to say a stable, predictable and competitive environment.
In keeping with the priorities dictated by the economic situation, the actions of the council are guided by five broad strategic axes set out in its action plan; three of these are more closely related to Bill C-10: competitive labour costs, intelligent regulation, and a sustainable, competition-based economy.
In light of these, the QEC was pleased to see the introduction of Bill C-10, which gives Air Canada the necessary flexibility to optimize its activities and continue to develop.
However, let us take a step back and look at the situation more globally, as others have done before me.
We think it is important to appreciate the value of the bill in the context of the need to strengthen the aviation industry in Canada, which has to be competitive.
The Canadian aviation industry is one of the cornerstones of our national economy. It is comprised of more than 700 companies spread out across the country, supports close to 180,000 direct and indirect jobs, and contributes $29 billion annually to our GDP.
Every year, it invests about $1.8 billion in R and D, which is on average five times more than the manufacturing sector invests.
Finally, the Canadian aviation industry plays a large part in our export market, as close to 80% of overall production is sold on foreign markets. That is enormous.
As it is among the largest world-class international players, Air Canada makes an important contribution to the Canadian economy, and is among the largest employers.
Exporting Canadian ingenuity and inventiveness to the world allows us to develop our competitiveness and continue to grow, and will help us to come out of this period of economic uncertainty. Knowledge- and innovation-based industries make us competitive and contribute to Canada's economy.
However, the players of the aviation industry are not dealing with a level playing field on world markets, as they face competition both from giant multinationals and governments. Since 1980, the contracting out of certain maintenance activities to specialized firms has become standard in this sector throughout the world. Allow me to remind you in this regard that the number of Air Canada's maintenance workers has more than doubled over the past 10 years. Today the carrier hires approximately 2,400 maintenance workers in Canada alone, in addition to the 1,000 workers employed by its regional partners.
However, no airline company in Canada or the world was subjected to maintenance restrictions like the ones that were imposed on Air Canada by the Air Canada Public Participation Act, even though these enterprises compete on the same markets for the same consumers. These airlines make their decisions based on the how their services compete in quality and price, and their lead times.
It is true that the Aveos company unfortunately had to close, and many jobs disappeared, but it is important to point out that as for any private firm, the success of that type of business depends first and foremost on its ability to compete effectively with its competitors through the quality of its services and prices.
It must be acknowledged that over the years Aveos was unable to keep up in this regard. Following its closure, other Quebec suppliers emerged. Through their expertise and competitiveness, they created hundreds of jobs in Quebec. They compete internationally to win airline carriers' heavy maintenance contracts, as was said a few moments ago.
The modernization of the Air Canada Public Participation Act will amend a law that was passed more than a quarter century ago, taking into account the fact that the air transport industry has changed greatly since then.
Bill C-10 will allow the carrier to make decisions based on its business acumen and its commercial discretion, just as private sector enterprises must be able to do. The bill affords it greater flexibility, which Air Canada needs if it is to compete effectively on the world stage. The bill recognizes that the carrier is an enterprise that belongs entirely to private sector interests, and does business in a highly competitive global industry. Indeed, the experts, some of whom appeared before your committee, refer to a very low profit margin of 2% to 4% for this industry.
By creating more equitable conditions, Bill C-10 will allow Air Canada to determine how much and what type of aircraft maintenance to do in Canada and elsewhere in the world. It seems clear that Bill C-10 will allow Air Canada to remain competitive and contribute to job creation in the fields of aviation, tourism and aeronautics in Canada for many years to come.
This bill is in fact in keeping with agreements concluded at the provincial level, in Quebec especially, where Air Canada has committed to contributing to the creation of a centre of excellence and maintenance for its C Series aircraft. The federal government acknowledges the settlement of suits involving provincial governments by amending the act in order to avoid similar litigation in the future.
In conclusion, the time has come to ask ourselves a simple question: do we believe the aviation industry should be a competitive part of our future? Our answer is a resounding yes. That is why we support Bill C-10.