Transport Committee on May 11th, 2016

[Sara Wiebe]

Can you repeat the question, please?

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

How many jobs will remain in Canada after Bill C-10 has been passed?

[Sara Wiebe]

Thank you for the question.

I think it's difficult to answer that question, given the rapidly evolving nature of the air industry within which our air carriers operate. I think we can certainly look to the jobs that would be created as a result of the purchase of the Bombardier C Series and the jobs that would be created as a result of the creation of the centres of excellence in Quebec and Manitoba. I think those are jobs that the minister spoke about when he appeared before this committee, which would result from the agreement between Air Canada and the provinces. Those are jobs that I think we can count on.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Does Bill C-10 establish a minimum number of jobs maintaining and overhauling Air Canada aircraft in the country?

[Sara Wiebe]

If you'll permit me, it's very difficult to answer a question in the hypothetical, and I think I would prefer to deal with the facts that are before us today rather than trying to answer on something that could happen in the future.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Does the bill we are studying today guarantee any volume of work in the country?

[Sara Wiebe]

Again, I cannot answer the question in the hypothetical.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I am going to continue my comments about the Conservative Party's amendment. To me, it seems quite ironic that the Conservative Party today wants to allow the governments of Quebec and Manitoba the time to negotiate agreements with Air Canada when, for years, we have been asking, as loudly as we can, for the Air Canada Public Participation Act to be enforced.

First and foremost, it was the Conservatives who let this situation deteriorate after Aveos went bankrupt in 2012, by doing absolutely nothing about the issue. The party that has always claimed to be the party of law and order suddenly found that the need to enforce the law was no longer on its agenda.

The situation in which we find ourselves today demands actions and decisions that are much more robust than the amendment that the Conservative Party is putting before us. The amendment deals much more with the form and the timelines than with the substance.

My Conservative Party colleagues have just voted against the NDP's amendment that sought to obtain a guarantee of jobs in this country. From that, I conclude that the Conservative Party agrees with the principle of outsourcing and with the loss of those jobs in the name of the almighty competitiveness.

The Conservatives are trying to be sneaky: they seem to oppose the bill, while, all the time, they are in favour of its general approach, which is to legalize the job losses that happened a short time ago and that the Liberal Party committed to defend. The aerospace sector, the manufacturing sector is very important for a number of regions, including the greater Montreal region.

I fail to understand the Conservative Party's position in presenting an amendment that does not seem to want to deal with the crux of the problem, which is to require Air Canada to keep aircraft maintenance and overhaul jobs in our country.

In my opinion, the argument made by my Liberal Party colleagues about the changing situation does not hold water. They are trying to have us believe that the situation changed between 1988 and 2016. In fact, the situation we are talking about changed between 2012 and 2016, but has not changed to any significant degree in the last four years. In the NDP's opinion, the commitments made by the Liberal Party yesterday should still be kept today.

I have a hard time seeing how the Conservative Party can spring to the defence of the former Aveos and Air Canada workers, given that it abandoned them four years ago. The Conservative Party has done nothing to improve that situation since.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Boulerice.

Mr. Maguire.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you very much, Madam Chair. I appreciate the opportunity to have a few moments to ask questions here as well.

I certainly want to say at the outset that I support my colleague's amendment that this not come into force before August 1, 2016.

My colleague from the NDP just inquired as why we would do this. I would say that we would do this because it would give a little bit of time for the government to come forward with more of the information and give time for the courts to move forward with their process even further. It may still not be settled in that time frame, but the governments in Manitoba and Quebec are very uncertain as to what the future might be in this present format under the Air Canada Public Participation Act.

I think it's a very reasonable amendment to bring forward at this time and I urge all colleagues in the transport committee to vote for this in order to, as I say, give us that bit of time to perhaps allow the courts to come through with further clarity and to provide an opportunity for more information to come forward as well. My experience both in the legislature in Manitoba and in Parliament is that it takes quite a bit of time to get freedom of information documents back.

This is important because there is no guarantee of the jobs being held in these areas. I'm not against the geographic changes they propose. I know the Manitoba deputy Premier indicated the other day before committee that perhaps they could look at expanding these geographic areas, as long as it was done within the provincial jurisdictions that are already named, and as well that it would help make sure there was a guarantee of 150 jobs coming into some of those areas.

Manitoba used to have some 400 jobs; now it's saying it will have 150. That doesn't look like a plus to me. Even though there would be 150 there, and I certainly would welcome them, I guess there's nothing to stop these airlines from moving maintenance projects to other areas that may be in more competitive jurisdictions, if we can put it that way. I'm wondering whether the government has taken that into consideration in bringing its amendment forward here.

I agree with Ms. Wiebe's comment that we should deal with facts and not hypothetical issues here, and I think this is a fact. What we have before us is a bill that provides certainty in those provinces for at least some time while the bill can be determined in court and finalized in those areas. I know that agreements were put forward, but there is no certainty in those agreements either.

I have a couple of quick questions for Transport. First, from your perspective, is it common for the government to amend legislation that is presently in front of the courts?

[Sara Wiebe]

I'll let my colleague from the Department of Justice answer that question.

[Daniel Blasioli, Senior Counsel, Department of Transport]

Thank you for the question.

Madam Chair, it's not uncommon; it's done. The bill was examined by the Department of Justice under its mandate and found to be fully defensible in respect of the rule of law. There are several examples in which it does happen that legislation is introduced to address matters under litigation.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Does Transport Canada, then, follow the Supreme Court case involving Air Canada on a regular basis, and what is the status of that case now?

[Sara Wiebe]

We continue to monitor the litigation associated with the case involving Air Canada. We understand that right now Air Canada is seeking leave to appeal to the Supreme Court. However, they've asked the Supreme Court to delay its decision with regard to that leave to appeal until the middle of July.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Can you, sir, from the Justice Department, give us an update on where this matter stands? Is it going to be put off until the end of July, or have they just asked for that?

[Daniel Blasioli]

That motion was filed before the end of December and it will stay proceedings until the end of that time period, July 15.

In short, nothing is happening. When July 15 comes around, the parties will be asked what they wish to do and whether they want to proceed with the Supreme Court decision on leave to appeal.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Okay, thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I have made a few observations throughout this process, which has been a lengthy one. We've had many witnesses and asked many questions and received many answers. But I do want to add some perspective to this bill. Bill C-10 is essentially an economic enabler, and I'll repeat that. It's an economic enabler. Frankly, it enables Air Canada to be more competitive.

I'm sure many of us around this table, including me, have been involved in business before, and I can never imagine having imposed upon me a rule that allows me to deal with only one supplier. Therefore, regardless of what that supplier may price their jobs out at, how competitive can we be if that's the only option we have?

This bill allows Air Canada to simply go out and get the best bang for their dollar—for our dollar, quite frankly, and the customer's dollar. Bill C-10 extends to Air Canada a method and ability to put in place a sustainable business model, to be competitive; to then, therefore, add fair ticket prices for the customer; to create future jobs through the centres of excellence that have been mentioned throughout this bill; to create a new niche market for Canada with respect to innovation, research and development, with not only Air Canada but others as well being a customer to these centres of excellence; to therefore add to the overall industry sustainability in terms of Air Canada being more competitive, and being a major player in the world's global market of aviation, but as well, sustainability in terms of jobs that have been a part of the Canadian history.

On training and retraining, we heard that 600-plus students are coming out of the schools per year. They need jobs. Our intent is to place those students in jobs here in Canada at these centres of excellence. The capacities, which right now are limited for the industry, are going to be expanded through competitiveness.

The larger issue with respect to the industry that we have to read into here with Bill C-10, and the responsibility of this government bringing forward Bill C-10, is sustainability for both the industry and jobs. The centres of excellence will in fact create critical mass. They will allow the industry to not only have the heavy maintenance and other jobs that have traditionally been within this industry but also create a cluster of complementary supply-chain businesses, and therefore, once again, more jobs.

We have to keep in mind not only the repair and the maintenance of the airplanes on an ongoing basis through the management of their assets, but also the replacement of those assets through the possible new contracts or, I believe, now beyond possible and therefore probable, contracts with Bombardier.

The ability to compete in the overall industry will also establish more returns on their investments, and more returns on the investments of the aviation industry.

Lastly, Madam Chair, I do want to state this. We listen not only to those from Air Canada but also to the briefs that were submitted to us by the different associations such as that from the association of the former workers of the Air Canada overhaul centres. I don't think we stop here. I don't think we stop simply with passing Bill C-10 to give Air Canada the economic enabler to move forward in a competitive industry. We also continue to work with the employees. I'm sure we all have a copy of the plans they dropped on our desks to also be a part of that supply chain. It behooves us to in fact work with them in the future, in order to enable them, in this economy, to be part of the supply chain, and to then create jobs, and supply to Air Canada and other carriers worldwide.

So this isn't over yet. Yes, we're going to pass the bill today that's going to be a benefit and an economic enabler for Air Canada to allow it to be more competitive and therefore add a better service, but also to move forward and ensure that we continue to work with those who want to make this industry that much better, especially as it relates to research and development and innovation.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Badawey.

I will suggest to the committee that we have approximately 30 minutes until the next vote, so perhaps we can just keep that in mind.

I have Mr. Fraser and then Mr. Berthold.

[Sean Fraser, Liberal, Central Nova, NS]

In light of the timeline, I will aim to keep my remarks very short.

At the outset, I'd like to thank my colleagues. A number of the members of this committee from different parties expressed sympathy to the workers who were affected by the Aveos bankruptcy. That is an emotion I think we all feel. In fact, I think the goal of every member of this committee may be similar or the same: to promote growth and protect jobs in Canada. The question on which we have a conceptual divide is perhaps the best method for doing that, or perhaps the best timeline in which to do it. On this side, I share the view of my colleagues, which Mr. Badawey put very eloquently: it's about creating winning conditions to grow the aerospace sector.

Specific to Ms. Block's amendment, which would have the effect of delaying the implementation of this bill until at least August, I believe the legislation is sound. If it will be a good idea in August then I believe it's a good idea today and we should proceed and take the opportunity that's before us to help drive innovation in this important and strategic industry for Canada and allow the private sector to create jobs, by passing enabling legislation, as Mr. Badawey explained.

In addition to expressing my views of the bill and the amendment, I want to give the department an opportunity to clarify.

Mr. Boulerice, I believe you made a comment earlier to the effect that Bill C-10 codifies an illegal action by Air Canada. I take a different view, but I respect your input.

I would like to have the department provide clarity as to whether they view Bill C-10 as codifying an illegal action.

[Sara Wiebe]

No, the department would not be pursuing the bill, if we determined that it was an illegal action.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

With that, Madam Chair, I'd be happy to put an end to my comments, if anyone else wanted to speak.

[The Chair, Liberal, Judy Sgro]

Thank you Mr. Fraser.

Mr. Berthold.

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

Thank you very much, Madam Chair.

A lot of things have been said over the last few minutes, and I think it is worth going back over what was said.

I would like to first talk about the comments made by my NDP colleague. Sometimes, it seems that the NDP is forgetting that the Conservatives no longer form the government. The Liberals are now in power and they are the ones making the decisions. By constantly going back over the various stages, it seems that my NDP colleague wants to remember the good times—at any rate, they are good for us. I was not there, but I wish I had been. It seems that the New Democrats are a little nostalgic for those days. I'm not sure whether that is the case, but I just wanted to gently remind my NDP colleague that we are no longer in power.

I would also like to comment on what he said about our amendment and clarify that, from the outset, our party made it clear that it was opposed to Bill C-10 as a whole. The purpose of our amendment is to see whether the federal government is prepared to recognize the jurisdictions of the Quebec and Manitoba provincial governments. Basically, will the government simply meet the deadline of July 15, which was requested in court by those two parties, so that they express their views and come to an agreement with Air Canada on the much-discussed maintenance centres?

The amendment has substance and seeks to find out what the government's intentions are. Honestly, since the beginning, we haven't been told what the government's intentions are regarding Bill C-10. We don't know why it wants to move so quickly on this bill. In short, a lot of questions remain unanswered, and the purpose of this amendment is to find out the government's true intentions and to see if it is at all responsive to the two parties, the two provincial governments.

It seems that the government wants to establish great relationships with the provinces. It wants to get along and do everything hand in hand with the provinces.

One of those two governments took the time to write a brief for the committee. We have not seen that often. I don't think that, in your experience, you have often seen a brief like that being sent to a committee by a provincial government. The provincial government is asking the federal government not to rush and not to pass Bill C-10 right away, because that might harm its negotiations.

The deputy premier of the other province appeared before the committee, saying that the bill made no sense and that it made no sense to pass it so quickly. I did not expect to see something like that so early in my career as an MP in the House of Commons.

The purpose of our amendment is to find out the government's position in relation to the expectations of the two provincial governments that made their views clear.

I also wanted to talk about other comments that have been made.

The Liberal Party is the government now. Mr. Badawey, you gave a great speech on job creation, Air Canada's competitiveness and the benefit for Canada of having a competitive sector in our aerospace industry. We fully share those views, Mr. Badawey. We completely agree on that. The big problem is that it is all an illusion. Bill C-10 provides no guarantees on anything you have said. There has been no confirmation of an agreement or clear commitment on Air Canada's part to create centres of excellence. In all the presentations we have heard, not one described a clear commitment to maintaining the existing jobs.

Sure, hypothetically speaking, it is all well and good, but when we ask Mr. Garneau to send us, in a reasonable amount of time, the documents that might justify our support for Bill C-10, we are told that we are going on a fishing expedition. We are told that we are looking for problems where there are none. If there are no problems, why do we have to move so quickly on Bill C-10? If there is no problem, there is no need to move so quickly.

Bill C-10 is quite short.

The first part deals with the Air Canada Public Participation Act. First, subclause 1(1) of the bill seeks to replace paragraph 6(1)(d) of the act with the following:

(d) provisions requiring the Corporation to carry out or cause to be carried out aircraft maintenance activities, including maintenance of any type relating to airframes, engines, components, equipment or parts, in Ontario, Quebec and Manitoba; and

As a result, an important provision has been replaced with that.

Then, subclause 1(2) of the bill seeks to amend section 6 of the same act by adding the following after subsection (3):

Maintenance activities (4) For the purpose of carrying out or causing to be carried out the aircraft maintenance activities referred to in paragraph (1)(d) in Ontario, Quebec and Manitoba, the Corporation may, while not eliminating those activities in any of those provinces, change the type or volume of any or all of those activities in each of those provinces, as well as the level of employment in any or all of those activities.

Where are the guarantees of jobs? I don't see them. There are none. I would ask our experts the question, but I won't, because they will say that there are none. It is pretty clear and obvious. There is no guarantee of jobs being created or maintained, because it is basically saying that they can basically do whatever they want with the maintenance activities.

A little further in the bill, there is a part on the amendment of articles and one on coordinating amendments. I don't want to take too much time, but I would like to say that this part includes another item that was mentioned by one of the witnesses, when we heard from the unions. I think it is worth repeating it for the members of the committee. I am talking about the maintenance activities. The bill says: “For the purpose of carrying out or causing to be carried out the aircraft maintenance activities referred to in paragraph (1)(d) in Ontario, Quebec and Manitoba, the Corporation may, while not eliminating those activities in any of those provinces, change the type or volume...”.

You must remember the little semantics lesson that the folks from the unions gave us. Is it “may” or “does”? The bill says “may”. The unions told us that this actually means that the corporation “will”, because they are keeping this open in the collective bargaining process. I remember distinctly hearing that comment during our discussions with the various unions.

There are a number of points I want to make, Madam Chair. There are a lot of things to say about Bill C-10.

Let's quickly go over the history of Bill C-10. I will point out the important dates that have prompted the committee to discuss Bill C-10 today, and I will tell you why we decided to oppose it. We want to see whether the government has listened at all to Ms. Block's motion on the importance of paying attention to the arguments of the provincial governments of Quebec and Manitoba.

On November 3, 2015, the Quebec Court of Appeal, Quebec's highest court, confirmed an earlier ruling by the Quebec Superior Court that Air Canada had failed to fulfill its legal obligations under the Air Canada Public Participation Act concerning heavy maintenance of aircraft in Montreal, Winnipeg, and Mississauga.

On December 11, 2015, Bombardier requested financial support of $1 billion U.S. from the Government of Canada. This was two months after the Government of Quebec had purchased a 49% stake in the C Series program for that same amount.

On February 16, 2016, Republic Airways, which to that point had placed a very large order for the C Series, filed for bankruptcy protection. It streamlined its operations and cancelled its order for the C Series aircraft. What happened the very next day? On February 17, Air Canada announced that it had begun negotiations with Bombardier to purchase 45 CS300 aircraft, with an option for 30 more. That's great. We are happy about it. We hope that Air Canada purchases the C Series aircraft.

On February 15, 2016, a meeting took place between the minister and the people from Air Canada. What happened at that meeting? Are there things that we should know about and that would enable us to support the government in its rush to pass Bill C-10? As I said before, a lot of questions have remained unanswered.

Let me say this again: we are thrilled about Air Canada's decision to purchase Bombardier's aircraft. That's good news. Not only will this decision have a huge impact on our aviation industry, but it also gives credibility to Bombardier's new aircraft. The proof is that Delta has purchased some aircraft not long after that. So, it is good news.

Thanks to Air Canada, therefore Bombardier has managed to become a credible company. We hope that other major international carriers, such as Delta, purchase more and more C Series aircraft.

Now, what is the relationship between the C Series aircraft and Bill C-10? There is none in Bill C-10. Those agreements are not mentioned. Is there a relationship? Does the government need the opposition for Bill C-10 to be passed, so that more jobs are created at Bombardier, so that more jobs are created in the maintenance centres in Quebec, Manitoba and Ontario? Does it need us? If so, provide us with the information. Provide us with everything we need to help us do our jobs as parliamentarians the way we see fit.

Let me remind you that the the member for Papineau, our Prime Minister, made a clear statement right here on Parliament Hill, before the Aveos workers in relation to the lawsuit against Air Canada:

It is such a shame that we have to demonstrate to ask the law and order government to obey [its own] law. It is ridiculous... They had made promises and said [that we should not worry]: “Don't worry about Aveos.” And now they are doing just what we had feared and people are being shown the door. We are losing the types of jobs that we need in this country. It is not true that our best resources are in the ground somewhere. Our best resources are human resources. They are qualified workers like you, who are building this country every day with your hands, arms, intelligence, and creativity. It is not right that the government is refusing to invest in what has made this country strong, and that thousands of Canadians who travel every day are being put at risk with potentially lower-quality maintenance. We are with you. Thank you very much for being here.

The member for Papineau made that fine statement on Parliament Hill before all the Aveos workers gathered to protest, urging the government of the day to do something. However, the government let the court decide. The Conservative government decided that it was up to the court to rule on that issue, because it was the provinces that had taken the issue to court. So, the government said that the courts would do their work.

What is the government doing with Bill C-10 now? It is telling the courts that it no longer wants them to be involved, because it supposedly has agreements with the governments of Quebec and Manitoba. So the matter will be settled once and for all. There will be no need to talk about it again and the provinces will have the tools they need to reach their agreements with Air Canada and obtain their centres of excellence.

Madam Chair, this is not the case. We have heard the views of two important witnesses. Officials from the governments of Quebec and Manitoba were wondering what we were doing. According to them, it did not make sense. They said that the governments were negotiating, they were in court and had a strong case. Air Canada agreed to listen to them precisely because of the risk of them winning their case before the Supreme Court, since they had won everywhere else.

And now the government is in a hurry to pass Bill C-10, although we don't know why because we never received an answer. We believed in the good faith of the minister. We believed the minister when he told us that, since the provincial governments had reached agreements with Air Canada, the government can now move forward with this bill, which would allow them to drop the lawsuits, remove the threat looming over Air Canada and ensure that jobs are maintained. However, we have received no guarantee of that.

I hope you have read the brief from the Quebec government because it is excellent. All parliamentarians should have seen it. Unfortunately, Minister Anglade did not appear before the committee to share her comments with us. But allow me to briefly summarize Quebec's brief, because it contains some fairly important points.

Quebec is proud of its aerospace industry. It is important to say that, because we often get the feeling that people think we are working against Air Canada, against the aviation industry, simply because we are opposed to Bill C-10. It is quite the opposite. The Quebec government strongly believes in its aviation industry. This is in fact why it has helped Bombardier.

As for whether or not this was the right thing to do, the Quebec government should be the judge of that. The fact is that more Bombardier airplanes are now being sold. We should definitely not impede current or future transactions.

The aerospace industry is one of the drivers of Quebec's growth and prosperity. The numbers speak for themselves. In 2015, the aerospace industry employed 40,000 people in Quebec in qualified and well-paid positions. It featured some 190 companies, with sales of $15.5 billion. That's what the aerospace industry in Quebec is. That is nothing to sneeze at. It is easy to understand why provincial governments are so concerned about their aerospace industry.

In 2014, 80% of the sector's output was exported, and that accounted for 13.6% of all of Quebec's manufacturing exports. I don't know what else we could say to make the federal government understand how important this industry is. When 13.6% of a province's manufacturing exports come from such a vital sector of its economy, I think it's worth looking into it. I believe that we should listen to the Government of Quebec and give it an opportunity to complete its negotiations with Air Canada. However, we should keep in mind that no agreement has yet been reached.

There are industry leaders in the aerospace sector of Canada and especially Quebec. Quebec's strength and the large number of industry jobs are due to the presence of four prime contractors. There is Bombardier, which we are familiar with and which manufactures commercial aircraft and business aircraft. There is Bell Helicopter. There is CAE, which specializes in aircraft simulators and flight training. For the benefit of my colleagues from other parts of the country, I want to point out that flight simulators used by pilots for their training are manufactured here, in Canada, but mostly in Quebec. It's quite interesting to see that we have such extensive expertise and skills. There is also Pratt & Whitney, which manufactures aircraft engines. Many of the airplanes we use to commute between Ottawa and our ridings are equipped with engines manufactured in Quebec's metropolis.

Madam Chair, I don't want to spend all my time praising only Quebec's aerospace sector. Manitoba also has a very strong aerospace industry. But I may have an opportunity to come back to this later on.

The reason the Government of Quebec decided to invest in the C Series program is precisely to protect those jobs. That was done specifically to ensure that Quebec can continue to be a leader in the Canadian aerospace industry and, more importantly, a leader in the global aerospace industry. The C Series aircraft are promising. Travellers from around the world will fly in airplanes that are 100% Canadian. So it is normal that the Government of Quebec wants to do its part and contribute to Bombardier's success. That is why it has undertaken discussions with Air Canada. It wants to ensure that the airline will purchase Bombardier's C Series aircraft.

Quebec had a lawsuit against Air Canada. The government has agreed to drop it and undertake discussions on Air Canada's purchase of C Series aircraft. The parties reached an agreement to postpone the decision on the application for leave to appeal until July 15. Unless I am mistaken, as of that date, they will be able to request more time or ask the Supreme Court to continue the proceedings. Is that right? Our experts are nodding to indicate that this is indeed the case.

The Government of Quebec says it has received assurances when it comes to centres of excellence. It now wants to obtain assurances in terms of jobs, and to do so, it must conclude good agreement with Air Canada.