Transport Committee on Feb. 19th, 2019

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

I was also talking about Transport Canada, which has been offloading a good number of its responsibilities for years. For example, when NAV CANADA decides to drop instrument flight services in a particular airport, do you have any right of appeal at all to Transport Canada so that you can demonstrate that you need that service for the reasons you described in your presentation?

[Martin Hivon]

Not at all. We are neither consulted nor advised. It comes as a fait accompli, and there is nothing we can say.

Take the airport at Rivière-du-Loup, as an example I know well. This is a little technical, but the three conventional instrument approaches have just been decertified. The VOR, the NDB, the transmitter itself, is still there. But the documents have gone, which means that it is of absolutely no use. Our only option is to make instrument approaches using the GPS system. For commercial pilot training, it is important to be able to do both, because you cannot fly with the GPS alone.

It was a fait accompli, and it was very recent. So we will have to go to another airport to be able to use those approaches, which will increase the costs.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I'm not going to preface my comments as I did last time. I believe you were in the room and heard them.

We are speaking of government funding or other opportunities that may exist at the federal and provincial levels, and hearing a lot of recommendations today with respect to a national strategy. I assume that it would include gender, linguistic, ethnicity, equality, education and of course, your operating challenges, as well as your capital challenges.

This should be an inclusive process that includes the private and the public sectors, government, yourselves, different organizations and associations, as well as obviously, the companies that are in need of pilots.

There should be consideration of different business models, especially as they relate to examples of international business models that exist across the world.

Ms. Block mentioned earlier that this is our last meeting to bring forward recommendations to satisfy what Mr. Fuhr is looking for.

First, am I accurate and second, are there any further recommendations you want to add that we can include in the final report?

[Capt Michael Rocha]

Accurate, in the sense of opening up for all of the different genders and different segments, or—?

[Vance Badawey, Liberal, Niagara Centre, ON]

What I'm getting at and what I've heard to date is what I just mentioned. When you look at a national strategy, if in fact that is the direction this committee embarks on, it is all of the above that we have heard, as you heard earlier in testimony.

[Capt Michael Rocha]

I think in terms of recommendations, one of the things I had noted down was definitely a national strategy in terms of airport infrastructure, and looking at the general aviation community aspect of it. I can't just make a blanket statement about them all, but airports that are run by regional governments are generally passenger-focused. They're trying to generate the revenues that way, as opposed to through general aviation. That's one definite recommendation.

As Mr. Foster said, there are alternative ways of delivering flight training. It has been shown that simulators specific to airlines are a fantastic way to train future airline pilots, and that does solve some of the airlines' needs. Keep in mind, with that, you also have to consider the general aviation needs in terms of just the general flying population, because you do need that segment to the industry. It does feed the other businesses that are at the airport—maintenance, etc.—and as well, not everybody is going to go and work for an airline. Some people might work in a 703 air taxi operation or a commuter operation, so you want to make sure you're not ignoring that aspect of it. That's generally what we've seen happen at some of the airports. They focus all on the airline and not necessarily on the general aviation community. Then when that aspect dies, the businesses that are there supporting them—the fuellers, the maintenance people—have a hard time staying in business. That aspect definitely needs a national strategy that takes into account the airline's needs as well as the general aviation needs.

If we can keep it as inclusive as possible...we need pilots. There are opportunities for everyone. I think the biggest thing I heard from the previous session was just getting the information and education out there to those groups. This is definitely important. I think that would go a long way.

There are external threats, too. I work in an airline, and there are pilots who are considering flying elsewhere. You can get an airline pilot trained here and they may leave. They may go and fly in the U.S. or Asia...opening up their markets. They are short of pilots as well, and those are real threats. The issues have to get addressed quickly.

[The Chair, Liberal, Judy Sgro]

We have Robert Lavigne, who's at the table with us. He's vice-president of the Kingston Flying Club.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Mr. Lavigne, you haven't had a chance to comment at all yet, so I'll open up the floor to you.

[Robert Lavigne, As an Individual]

Thank you.

Quickly, the Kingston Flying Club is the oldest surviving flying instructional institution in the country. We were founded in 1927, and the fact that we still exist is a marvel largely predicated on the fact that we are a federally chartered charity.

I don't have much time, so I'll just tell you quickly. Because we have volunteers from a different catchment, we have M.B.A.s, Ph.D.s and so forth attached to our group.

Let me touch on some of the more hard-core business-related information that you may lack. The flying school business today largely survives on a net variable margin of 3% to 7%, and I challenge you to find any other business in the country that can survive at that level. We all do it because we want to do it, and we care to do it, and there's a passion for aviation involved. Often those schools are attached to the communities and render services to those communities. Sometimes, as Jo-Anne was telling you from Tyendinaga, they're attached to the very survival of the communities. There are things like 703 air taxi operations. We heard them referred to earlier.

It's really important that you understand that there are significant capital considerations. More than 70% of the costs of every one of the schools you're speaking to here are generated in U.S. dollars. All our equipment, all our fuel, oftentimes subscriptions that operate things—for example, our scheduling software and so forth—all come from the U.S.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go on to Mr. Fuhr.

[Stephen Fuhr, Kelowna—Lake Country, Lib.]

Thank you all for coming. Bob, Michael, Richard and Martin, it's nice to see you again.

I don't have a ton of time. I want to reinforce this, because this is coming to a close really quickly and the committee will have to deliberate on recommendations to the Government of Canada. This isn't overly complex. We need to remove the barriers for students to get into pilot training. Largely, it's financial. There might be a couple of other ones, but the bottom line is that it's expensive, and people can't afford to do it anymore.

We need to train more effectively, and I think competency-based training, as Martin mentioned, is part of the solution. It will reduce time to get people out the door and working, and it will save some money. Transport would need to be a big part of that to see where that fits because it won't fit in every phase of training, but I think there's a place for it.

We need to get people back into instructing. We have to figure out how to do that. Again, that will largely be financially based. I would prefer to see people coming back off the career end than the upstream end. They just bring a lot more to the table. Again, that will be a financially incentivized process, I'm pretty sure, and then you, if you agree, can deliberate on what that might look like.

I also agree with something Martin said that I hadn't heard here today. I hold two airline transport ratings: an American one and a Canadian one. I recently had to renew my Canadian one, and it was a way bigger process than I thought it would be. In fact, if I was depending on that to go to work every day, I probably would have stayed home for a few weeks to try to get that sorted out.

Transport is going to need to step up its game in supporting...whether it be exams, licensing or whatever. I think we need to have a good long conversation about that.

I would like to give some time to Mr. Foster. He was in the process of going through some recommendations, and I want the committee to hear what those were because he didn't get time to finish.

[Richard Foster]

Just to reiterate, I think we need to develop a national strategy. I think the market is going to try to correct itself, and the business airlines are going to go elsewhere other than Canada if we don't align ourselves and provide for the students.

I think it's important to bring the appropriate stakeholders to the discussion: the airlines and companies like L3 and CAE that can provide infrastructure and resources. Then we need to separate and look at what the rest of the flight schools can to do in order to support that. There is going to be a critical mass requirement in terms of resources and infrastructure to make this work. We're not talking just over five years. We're talking in the longer term—10 to 20 years, I would think.

In terms of the other business models, just to elaborate a little bit, there are several. I know Martin was mentioning the problem of retaining flight instructors. The model we have in Florida, which trains about two-thirds of foreign national students, allows us to keep instructors in place because there's not a glut of students coming out and going into the airlines. The gentlemen and the ladies who are staying in the United States can stay on as instructors to build their time. There's enough flow-through from foreign national students going elsewhere to allow them to stay and to allow an instructor base to flow through that pipeline.

I think those are the kinds of models that a national strategy task force should be able to look at, and I think you need to get the appropriate stakeholders around the table to develop that.

[Stephen Fuhr]

Thank you.

I would like to give whatever time I have left to Mr. Lavigne so that he can come back into the conversation.

[Robert Lavigne]

There was a question earlier regarding carbon tax. That's largely irrelevant to us. It's a rounding error.

In Ontario, for example, the Ontario government insists on charging flight schools road tax on aviation gas. If we extract that, the carbon issue is irrelevant.

We would like to see something come back à la Nav Canada: a bursary system fed back, for example, through BDC to allow people to have a capital pool for either bursaries or capital. There are many opportunities for us to deal with this. Flowing veterans back through the veteran education piece to flying schools and tax relief for retiring airline pilots would be suggestions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Foster, your notes here say that you have 31,000 employees worldwide. We've heard from you about a couple of things that you think the U.S. does better than Canada. What about other countries in the world? Is there something we could learn from the U.K. or from any of the other free world countries? Do you have any thoughts there?

[Richard Foster]

Yes, absolutely.

Although the examples I used are U.S.-based, our commercial aviation division is headquartered in the U.K. We have a flight school in the U.K. We're paired with the RAF. We also have flight schools in New Zealand. Most of them are paired or are pairing with airlines, which I would submit is probably going to be the future model of how airlines train.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

In those cases, the airlines run the flight schools, is that what you're saying?

[Richard Foster]

No, they pair with us. We work with easyJet and British Airways, for example; they tell us what their requirements are, and we do all the heavy lifting up front in recruiting, selecting, financing and getting the students. Then those two airlines guarantee those students a right seat after completion. That's the agreement we have, based on our ability to provide them the standard of pilot they need.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I guess that works for major airlines, but in some of the earlier testimony we had, because of our geography we have high demands in this country for private flights into the north. We're told those kinds of jobs are really hard to fill in a lot of cases. I hear what you're saying on the partnership with British Airways.

Do they have any funding models in the rest of the world that you might be aware of that we could take a look at?

[Richard Foster]

I gave you the example of our helping students find the financing. We have people whose job that is. When these people show up, we assess their ability and then we help them meet their financing. Then we work with the banks to provide the—

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Okay, but effectively at the end of the day, the student is still stuck with the high cost of training.

[Richard Foster]

I'm not sure. The student gets a very high chance of getting a job. This model helps offset the demand that is drawing student pilots and other people from the north, for example. I think you need to create two different models, one that's servicing the airlines and then another that is focusing on the northern region or on commercial pilots. You need to satisfy the market demand of the airline industry somehow.

[The Chair, Liberal, Judy Sgro]

It's 12:58.

Thank you to all our witnesses for sharing your knowledge and time with us, and to Mr. Fuhr for bringing this bill forward. It's been fascinating, and I think a real learning experience for all of us here on the committee.

The meeting is adjourned.