Transport Committee on Dec. 4th, 2018

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order this meeting of the Standing Committee on Transport, Infrastructure and Communities.

Pursuant to the order of reference of Wednesday, November 28, 2018, we are doing a study of challenges facing flight schools in Canada.

With us as witnesses today, from the Air Transport Association of Canada, we have Darren Buss, the vice-president.

From the Canadian Airports Council, we have Daniel-Robert Gooch, president.

And from the Northern Air Transport Association, we have Glenn Priestley, the executive director.

Welcome to all of you.

Good morning to committee members. Thank you all for being here on time this morning.

We'll turn it over to whoever would like to begin.

Mr. Buss from the Air Transport Association of Canada, would you like to begin? You have five minutes. Go ahead, please.

[Darren Buss, Vice-President, Air Transport Association of Canada]

Thank you very much.

Good morning, and thank you very much for the opportunity to be here today to discuss the challenges faced by Canadian flight schools in meeting the needs of the Canadian aviation industry.

As you know, I'm here representing the Air Transport Association of Canada, or ATAC for short. Since 1934, ATAC has been the national association for commercial aviation in Canada. We're the voice of almost 200 member companies engaged in all kinds of commercial aviation all across Canada. That includes 50 flight training organizations that, together, deliver about 80% of all commercial pilot licences issued in Canada.

The recommendations I have [Technical difficulty 8:49:46 - 9:36:48—witnesses' briefs taken as read—Editor]

Overview

ATAC welcomes this opportunity to present recommendations to the House of Commons’ Standing Committee on Transport, Infrastructure and Communities. The recommendations presented here fall into four broad categories:

1) Support student pilots

2) Support flight schools

3) Support research

4) Support outreach

This document also contains background information on topics such becoming a pilot, and the typical pilot career path.

About ATAC

Founded in 1934, the Air Transport Association of Canada (ATAC) serves as Canada's national trade association for commercial aviation and flight training industries, as well as aviation industry suppliers. Our membership is comprised of about 200 companies engaged in commercial aviation all across the country, including 50 flight training schools that together deliver approximately 80% of all commercial pilot licenses issued in Canada.

Representing ATAC on flight training and labour market issues, including the current pilot shortage, is Darren Buss. Darren has an airline transport pilot license and 13 years experience as a professional pilot. He holds the title of Vice President at ATAC, and also sits on the board of directors at the Canadian Council for Aviation and Aerospace (CCAA). Since graduating from the Aviation and Flight Technology program at Seneca College in 2005 he has flown for air operators in Alberta, Manitoba, Saskatchewan, and Ontario, steadily gaining responsibilities as a pilot, training pilot, and manager. Darren holds a Bachelor of Science degree in Mathematical Science (specializing in Computer Science) from McMaster University, where he also studied Materials Engineering, and previously worked as a software developer.

Recommendations

1. Implement Government Backed Student Loans for Flight Training [Support Students]: Lack of financing is the most often cited reason why people discontinue flight training or choose not to pursue it at all. Making financing available would bring more people into aviation, and also give policy-makers a tool to incentivize people into jobs where they are most needed, such as flight instruction and medevac. A similar incentive program already exists for medical personnel working in remote areas.

ATAC is consulting with commercial banks to create a student loan product for pilots. It is clear that banks are not willing to do this unless the loans are backed by government. Fortunately, a relatively small investment by government would result in a nation-wide student loan program for pilots that could then be used to incentivise pilots into jobs where they are desperately needed. ATAC estimates that less than $5 million per year, over a 10-year program, would be sufficient to do this. This is based on the following:

• 600 commercial pilots trained annually (domestic only)

• Worst case, all those pilots borrow the full cost of training ($75,000)

• 600 pilots/year x $75,000/pilot = $45 million/year borrowed from bank

• Modelled loan default rate is 10%, therefore approximately $4.5 million/year goes to default

2. Approve the Proposal to extend SWILP to Pilot Training [Support Students]: Student Work Integrated Learning (SWILP) is an excellent skill development program that has helped thousands of students acquire work-related skills. A proposal has been made to extend the applicability of this program to include pilots wishing to become flight instructors or floatplane pilots. This would increase the number of available flight instructors and therefore Canada’s capacity to train more pilots. This proposal has received wide praise from both industry and government, but it has not yet been implemented.

3. Help Flight Schools Invest in New Technology and Infrastructure [Support Flight Schools]: The typical Canadian flight school operates aircraft that are older than the pilots who fly them. Newer aircraft are often quieter and more fuel-efficient than older aircraft. They are also more similar to the modern transport aircraft that student pilots will be expected to operate when they join the workforce, which makes them more effective trainers. Simulators are another game-changing technology that is in short supply at most flight schools due to the fact their cost is similar to a new aircraft.

New single-engine training aircraft typically cost around $400,000 USD. Multi-engine trainers typically start around $700,000 USD. Certified flight training devices (FTDs), commonly called simulators, start at about $300,000 USD for a single-engine aircraft and go up to several million for larger aircraft. Ideally, flight schools operate 7 single-engine aircraft for every multi-engine aircraft, and as many simulators as they can afford and have the space for. These are huge capital expenses for small businesses that operate on very tight margins.

A government program of matching spending on eligible purchases including aircraft, simulators, and facilities expansion (for simulators) would almost immediately increase capacity to train new pilots by enabling flight schools to make these critical investments. Giving preference to aircraft manufactured in Canada would also stimulate aerospace manufacturing in Canada. For example, the government program could offer $1 for every $1 spent by a flight school on aircraft and simulators built outside of Canada, and $1.20 for every $1 spent on products manufactured in Canada.

As a rule of thumb, every aircraft added to a flight school’s fleet allows that school to train an additional 7 pilots per year.

4. Establish Approved Training Organizations (ATO) [Support Students & Flight Schools]: The Canadian Aviation Regulations (CARs) are the regulatory foundation for all aviation activities in Canada. They have remained largely unchanged since they were introduced in 1996. Since then, many things have changed, including advancements in simulator technology and a shift towards evidence and competency-based training techniques. The wording of the CARs, rooted in the thinking of the early 1990’s, effectively prevents these advances from being used in ab-initio flight training only because they were not envisioned CARs were written. The CARAC process for changing the CARs is slow and difficult, but there is another way.

Aviation Training Organizations (ATO) is a framework used in other jurisdictions around the world that allows flight schools to demonstrate compliance with the desired result of the regulations using a different means of achieving it. For example, if the regulations state that an applicant for a private pilot license shall have completed a minimum of 45 hours of flight training, including a maximum of 5 hours in an approved simulator, an ATO might demonstrate that completing 20 of the 45 hours in an approved simulator produces pilots that are at least as competent. Using this approved syllabus, the ATO can conduct training that produces better pilots, less noise and less pollution, often at lower cost. ATO trained pilots must meet the same standards and pass the same assessments as their non-ATO counterparts. ATO may also open the door to using evidence and competency-based techniques in ab-initio training, which would further improve efficiency.

ATAC has been working with Transport Canada on an ATO framework for several years. Every year we hear that it is close to being ready. ATAC believes it would be in the best interest of the general public as well as pilots and the aviation industry for a carefully designed ATO framework to be approved as soon as possible.

5. Support Research Activities [Support Research]: Good data drives good decisions. Rigorous study of what prevents people, particularly those from underrepresented groups such as women and indigenous people, from choosing careers in aviation would be helpful in making decisions on the best way to allocate funding.

ATAC recommends that the government allocate resources, either internally or through an organization such as the Canadian Council for Aviation and Aerospace (CCAA), to complete such a study.

6. Support Outreach Activities [Support Outreach]: Any long-term solution to the current labour market shortage must include outreach to people not currently involved in the aviation industry. This includes youth, workers from other industries displaced by layoffs or wishing to change career, and people outside of Canada who may wish to immigrate.

ATAC recommends that the government make funding available to associations, such as ATAC, who are in a position to organize outreach events across Canada and internationally.

Aviation Labour Shortage

Canada faces a critical shortage of pilots and demand is expected to grow for the foreseeable future. Industry must increase annual domestic flight training output approximately 50% to meet the expected demand by 2025. Traditional recruiting methods are not sufficient; we must attract and retain a broader section of eligible workers. Only 7% of pilots are female. Fewer are aboriginal. Lack of access to financing for initial training costs is a major barrier for many.

Professional pilot training typically costs about $75,000. Little or no financing (government or otherwise) is available to cover this cost. Access to financing would bring more people into aviation, and enable incentive programs for high demand jobs.

Becoming a Pilot

One of several paths to becoming a professional aeroplane pilot in Canada is by enrolling in an integrated Commercial Pilot License – Aeroplane/Instrument Rating (CPL(A)/IR) integrated course at a Transport Canada certified flight school. These courses last between 9 and 36 months, with the typical duration being 18 months. They must include at least 400 hours of ground school instruction, and 190 hours of flight time, all of which must also meet a number of sub requirements. Students in an integrated program must successfully complete the knowledge requirements and pass flight tests for the Private Pilot License (PPL), Commercial Pilot License (CPL), multi-engine class rating, and the Group 1 Instrument Rating. Upon completion the student will be qualified to operate single pilot multi-engine aeroplanes in commercial air services, however, with no work experience job prospects are limited. Cost for this training varies, but $75,000 is representative.

The most common way for new commercial pilots to gain experience is to become flight instructors. To become a flight instructor, the new commercial pilot must complete an additional 30 hours of flight time and 25 hours of ground instruction. This additional training typically costs about $10,000.

The highest license a pilot can obtain is the Airline Transport Pilot License (ATPL), which has historically been required to obtain employment at a regional or national airline. The requirements of the ATPL are typically met in the course of working as a pilot in the early part of one’s career. These include passing two written exams, and completing 1500 hours of flight time. With an ATPL in hand, a pilot’s career is limited only by his or her ability and aspirations.

The ‘Typical’ Pilot Career Path

New commercial airplane pilots today have three choices when it comes to getting their first job:

1. Become a flight instructor

2. Work for an air operator in a remote area. In the current labour market these operators are desperate for pilots, however, many have insurance or contractual requirements that prevent them from hiring pilots with less than a minimum number of hours (often 500 hours). Some remote operators may also require a float rating at a cost of about $10,000.

3. Direct-entry first officer with a regional airline. Some regional airlines now have partnerships with select flight schools where a fixed number of the top graduating students are offered direct-entry flying positions with that airline. This is a recent change made necessary by the current labour shortage.

[Daniel-Robert Gooch, President, Canadian Airports Council]

Madame chair, members of the committee, it is a pleasure to appear before you again today to speak to an area of growing concern to many of the communities our airports serve -- a shortage of qualified commercial pilots, which is leading to reliability problems on important regional air routes. This is the aspect of flight schools that I will focus my comments on.

I am president of the Canadian Airports Council, which represents 54 airport operators, including 25 of the 26 NAS airports and 29 operators of regional airports.

It goes without saying that airports don’t hire pilots, nor do they determine what air services are operated from which communities. In the deregulated air transport sector we have had since the 1980s, these are decisions made by private airlines, including large network carriers and their regional affiliates but also a dozen or so independent regional air carriers. And most air routes are not subsidized.

This context is important, because communities really are vulnerable to market conditions and the decisions made by air carriers on whether they will fly to their community, how often, and for how much.

Canada’s airports make up a system of independent, but interdependent airports. An aircraft that takes off from Toronto Pearson or YVR has to land somewhere, and so problems for one group of airports impact many others. That being said, the pilot shortage is being most acutely felt in Canada’s regional air service markets throughout the country. British Columbia, New Brunswick, northern Ontario are just three regions that are being impacted, with regularly scheduled flights being cancelled often enough that travellers looking to buy a ticket for one of these routes have to ask themselves just how badly they need to get where they are going on time.

I’ll give you an example of this. Allen Dillon, a frequent flyer and CEO of a cyber security firm in New Brunswick was recently profiled by the CBC. He takes more than 100 flights a year and now has to catch much earlier flights just to ensure he can make his meetings on time because he is finding a major delay or cancellation about 40% of the time. It’s like shutting down a major highway on a regular, but unpredictable basis.

This is a serious concern. Airlines make service decisions based on the financial strength of a given route. If travellers lose confidence in a route and traveller numbers fall, how long does that route stay around?

The shortage of pilots is not unique to Canada, it’s a global concern and Canada competes in a global market for talent. And the concern is not just limited to pilots either. According to the Canadian Council for Aviation and Aerospace labour market report released in the spring, of an aviation sector that employs about 154,000 people today, some 55,000 new workers will be required in this sector by 2025, including other skilled workers like maintenance technicians and air traffic controllers. Based on current educational program capacity, only a quarter of that demand will be filled by domestically trained graduates.

In terms of pilots specifically, the labour market report suggests Canada will need about 7,300 pilots by 2025. We’re only producing about 1,200 new pilots a year and nearly half of these are international students who typically return to their country of origin. Only 70% of these new pilots even stay in the industry. These factors taken together mean we’re only really producing about 500 new pilots a year, which will lead to a shortage of about 3,000 pilots by 2025.

Moreover, our colleagues in the regional air carrier community are concerned that proposed regulatory changes to air crew duty times will significantly add to the shortfall.

When we consider the impact that a shortage of pilots is already having on air service in some communities, this future is a big concern, which is why this study is timely.

There are plenty of ideas on how to fix this, including more financial support options for prospective students, changes to how these programs are viewed vis a vis financial support by government, creating better options for foreign students who may want to stay to pursue an aviation career in Canada, and improving access to simulators and other technological tools. But we will leave it the experts in these fields to weigh in on those ideas, as I do want to address the second part of the committee’s study -- whether the infrastructure available to flight schools meets the needs of the schools and the communities where they are located.

I’ve spoken with you about the financial challenges faced by small regional airports, where the Airports Capital Assistance Program is the only infrastructure investment fund available for safety and security related projects, and its funding is limited to about $38 million a year. This is an important program, but funding is insufficient for the airports already eligible, which doesn’t include general aviation airports without commercial service.

Flight schools are located throughout Canada, at both commercial and general aviation airports. Some of these are located in urban areas, where they are close to prospective students but also close to residential communities, homes and schools.

Flight schools by their nature involve a lot of activity close to the base airport, including take offs, landings and rotations. This activity contributes to the concern of residents in some communities around aircraft noise.

As this committee heard recently, aircraft noise in residential communities near airports is a complex issue to manage, and one that is best dealt with on the ground in the community, as it is a very local issue. A flight school may be a concern for some airports with unhappy residents. Another airport with a different community configuration may welcome them with open arms.

I’m happy to take any questions the committee may have.

[Glenn Priestley, Executive Director, Northern Air Transport Association]

Good morning.

We would like to thank the committee for including the Northern Air Transport Association on this important study of flight training resources in Canada.

NATA was formed over forty years ago to support the economic development of northern and remote Canada. Northern operators have always faced unique challenges that are very different than what is experienced in southern Canadian aviation. The attraction, recruitment and retention of adequate flight crew including maintenance personnel has been an ongoing challenge.

The traditional northern aviation labour market model was southern trained Canadian pilots, would seek aviation jobs in Canada’s north. Often this was seasonal employment requiring aviation workers to return or be replaced. There was an annual flight crew and maintenance personnel production level that usually provided a surplus of labour that developed a worker over a 2-5 years of work experience to become industry competent. There was a challenge to retain those now skilled workers. This challenge is increasing for reasons that are well known.

Northern and remote operators predominately use turbine engine equipped aircraft, often operating into short, unpaved airstrips. There are also operators offering air service with what would be considered traditional float or ski equipped aircraft. Examples of specialized operations including medivac, fire fighting, air survey. To fly these missions, pilots need to be highly skilled, with specific mission competencies. Few flight schools in Canada provide this type of preparatory training for northern operational realities.

NATA operator members are reporting it is taking longer to provide the training necessary for entry level new hire pilots to meet the proficiency requirements for pilots to be legal flight crew in accordance with the Canadian Aviation Regulations. Operators are raising concerns regarding the lack of basic knowledge and skills of new hires that should have been covered in commercial pilot flight training.

The new reality is flight instructors and pilot examiners have reduced operational and instructional experience and NATA wants to work with the regulator to find solutions. For instance, the current regulations concerning flight training are too restrictive. There are more than enough flight training units in Canada, but there is a lack of instructors with the applicable experience because it is difficult for current, or retired pilots to become involved in a flight training program.

It is important to note that while there is a national commercial pilot licensing standard, there is no national commercial pilot training standard. This allows for flexibility in training delivery to the licensing standard. NATA believes there should be sector specific standards and any occupational standards that help improve the aviation worker competencies should be made available to the entire industry and should be supported by the regulator. There should be incentive funding for companies to support industry use of occupational standards to develop competency-based training.

Most training in Canada is focused on producing pilots for southern flying jobs. There are very successful programs in Southern Canada that are streaming pilot graduates into direct entry pilot positions. Due to the changing operational environment, and specialized skill sets this does not work for northern and remote operators.

To insure a competent workforce, many air operators-members are developing partnerships with flight training providers as well as sponsoring selected personnel for career development. For instance, in Whitehorse, a NATA air operator member also offers a full-service flight training with an aviation college diploma program. Having students train in proximity of real air operations needs better recognition of crediting aviation experience. This includes partnership with northern operators offering mentoring and workplace training support for northern based students and workers.

On October 2, 2018 at the Transport Canada Civil Aviation Labour Shortages Forum, the Minister of Transport addressed the challenge of attracting the next generation of aviation workers, especially non-traditional workforce groups such as females, indigenous and other under represented visible minorities. While the forum focused primarily on southern Canada flight crew shortages and solutions, it is important to emphasize; Northern and remote aviation stakeholders are experiencing a shortage of personnel for all aviation related occupations. However, there are various barriers that need to be considered to develop a program that would be successful in attracting, training and retaining northern youth for aviation related occupations.

Any skill development program needs to be sensitive to geographical and cultural realities. It is problematic for students to have to leave their home and community to go to a school far away for a long period of time. There is an opportunity for more Industry sponsored federally funded On the Job mentoring and training, customized for specific cultural needs and company specific skill development requirements.

The overriding concern is the access to vocational tuition funding.

The federal government should change tuition tax deductibility rules to be more inclusive of aviation flying, technical skills upgrade training and work experience. Registered Education Savings Plan (RESP) tax deduction status should be revised to offer more incentive to the contributor.

There needs to be funding programs to encourage employers to establish in company mentoring program and sponsor local public-school aviation career awareness initiatives. There are so many excellent programs that have been developed with federal funding but are under utilized.

Attached to this Written Brief, is NATA Resolution 2018-5- outlining the need for a northern and remote focused aviation labour skills committee, as well, included is a summary and reference document to three territorial labour market analysis supporting the comments made in this submission. The limited labour needs information for flight crew identifies the need for more northern and remote aviation sector specific demographic analysis. In conclusion, NATA’s 43rd northern and remote aviation conference is taking place April 28-May 1, 2019 in Yellowknife.

On behalf of the Northern Air Transport Association I would like to invite the committee to attend our conference to continue this important discussion on aviation labour-skills development.

Thank you.

[Matt Jeneroux, Edmonton Riverbend, CPC]

[Technical difficulty resolved—Editor]

on fuel. I would imagine, then, that it's likely the students who would end up paying for a higher cost on fuel. Can you correct me if I'm wrong?

Everybody can weigh in on some of this.

[Darren Buss]

For my part, I wouldn't care to comment on how businesses allocate their funds or pay their fees, but certainly there's room for discussion on decreasing taxes on fuel, particularly in Ontario.

[Matt Jeneroux]

Would a carbon tax, a tax on fuel, increase the cost of a flight school, the cost for a student to attend?

[Darren Buss]

I can't say that definitively. I would say that would be up to each individual business.

[Matt Jeneroux]

Mr. Gooch, do you have any comments?

[Daniel-Robert Gooch]

I don't really have anything to add there. The carbon tax is not one that our organization has taken a position on.

We've looked at our industry broadly, in terms of what our priorities are, and I think we've articulated them at this committee fairly frequently in the past. Carbon tax is not one that we have taken on as an issue to work on.

[Matt Jeneroux]

Mr. Priestley, would you comment?

[Glenn Priestley]

I have no comment.

[Matt Jeneroux]

It's funny, because we had the minister here last week saying that he hadn't heard from anybody that a carbon tax is detrimental.

Just thinking logically, the price of fuel has gone up, so that would then impact the flight schools in terms of the costs of actually flying. I would struggle to think that it wouldn't be a major prohibitive factor in the cost for students to come there.

It's something to consider. I certainly think that as we go through the course of this study, it's something that I know will be a burden for many others out there.

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Badawey is next.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair. I'm going to split my time with Mr. Fuhr.

The first question is with respect to the training program.

You mentioned, Mr. Buss, the government programs and matching spending on eligible purchases. Currently, what organization is actually matching this spending? Is it the airport itself? Is it the association?

[Darren Buss]

There's no matching spending right now. For all capital expenses, it would be up to the business to front 100% of the costs.

[Vance Badawey, Liberal, Niagara Centre, ON]

Are the airports that normally have the training centres individually owned? I know that in my area, they partner with municipalities. Municipalities are sometimes then looked to by the organization to do a lot of the capital spending.

Do you see it as a challenge for most of the smaller airports that the municipalities simply don't have the wherewithal to put that financial capital in place?

[Darren Buss]

It's possible.

As you know, there are a wide variety of municipalities that host flight schools. Some have more means than others. I would say that as far as infrastructure investments and facilities and whatnot go, that might very well be a good source of revenue to look at.

I could be wrong, but I don't see a municipality investing in aircraft or simulators.

[Vance Badawey, Liberal, Niagara Centre, ON]

Some do. I was one of them.

[Darren Buss]

Okay. That's good to know.

[Vance Badawey, Liberal, Niagara Centre, ON]

With that said, is there the opportunity, if you're partnered with a municipality, to in fact tap into some of the existing infrastructure programs that are in place? They could be science and technology, innovation, R and D, or just basic infrastructure programs.

[Darren Buss]

I would love to know more about that. Maybe you and I can talk afterward.

[Vance Badawey, Liberal, Niagara Centre, ON]

Absolutely.

My second question, before I go to Mr. Fuhr, is on the current pilots. Have the association or the bodies that you work with given any incentive to existing pilots to do training? That's question number one.

Question number two is, with reference to that, does it also give those pilots an opportunity to upgrade their own licensing while they're actually training, with respect to what the requirements are?

[Darren Buss]

When you say an opportunity to do training, do you mean an opportunity to become a flight instructor, or to do training for oneself?

[Vance Badawey, Liberal, Niagara Centre, ON]

I mean both.