Transport Committee on Feb. 19th, 2019

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I want to welcome our witnesses here. We are now on the last day of this study hearing from witnesses. Of course we'll provide some recommendations in terms of what we've heard. We've heard from many of our witnesses, over the course of reviewing this private member's bill and studying this issue, talking about the challenge our flight schools are facing. That probably goes without saying, given the title of this study.

I know many have mentioned the financial challenges, the cost of training, as well as the cost of highly technical equipment and the need to innovate and move to newer technology in order to provide the best training possible to our flight students.

One of our witnesses in the previous panel outlined the costs borne by flight schools. She made the observation that flight schools are operating in what she referred to as a very unpredictable environment. I want to quote something that we heard from the National Airlines Council just last month. In a statement, they estimated that “by 2030, a...carbon tax...would add over $800 million [a year] to the cost of air travel”. I'm wondering if you could comment for us on how that policy, driven by government, to impose a carbon tax on the air industry would affect flight training schools. Will it raise the costs for a flight training school, and how does that fit with our desire to address your challenges? Here we are imposing yet another one.

Any of you can answer that question.

[Capt Michael Rocha]

I can start.

I think when you add cost to the industry, the customer will ultimately have to pay for it, which will be the prospective pilots and the students. What they're going to do is look at their options and say, “Okay, am I going to spend $100,000 to do a pilot's licence to make x amount of dollars, or can I go into another industry and do something else?” That's ultimately what ends up happening: the costs get so high that they'll do other things and they'll go and find other jobs and professions to pursue. So I think you have to be very respectful of the sensitivity to the cost of doing flight training.

[Richard Foster]

I would agree with that. I think the cost eventually would be passed on to the customer with any kind of regulation. I do think the industry is trying to align itself to reduce its carbon footprint with new technologies. I would say that I think it's important that the business model that would help Canada to provide for future jobs in the airline industry needs to align itself with airlines. For example, Lufthansa, as I understand it, actually recruits right from the beginning and trains its pilots through their entire program, which helps offset a lot of the cost.

We talk about flight schools and recreational flying, and then we talk about the business of the airline industry. To me, those are two different things, and perhaps they need to be addressed in two different ways.

[Martin Hivon]

Basically I fully agree with what I've heard so far. Any additional costs will eventually be passed on to the customer. In the case of a flight school, the customer is the student pilot. But all of that is going to eventually end up at the industry level, and the ultimate customer, the regular passenger on any airline, will end up footing that bill. There's no miracle there.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Iacono.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Madam Chair.

My first question goes to Mr. Hivon. In your presentation, you mentioned that the majority of industry leaders are increasingly promoting skill-based training.

Can you tell us about the advantages and disadvantages of that kind of training? Can you also talk to us about the obstacles that currently exist?

[Martin Hivon]

Current regulations allow no flexibility. The whole system that Transport Canada manages is based on a certain number of hours per type of training. For a private pilot, the minimum is 45 hours of flight time; for commercial pilots, it is 200 hours. Nothing lets us determine whether a student is ready to move on to the next stage after 35 or 40 hours of flight time. Is a student who has logged 175 hours of flight time ready to obtain a commercial pilot's license? No consideration is given to questions like that.

My flight school is somewhat unique. First, we taught aerobatics. Then, the school started offering standard training. We include more advanced training into the commercial pilots' training. We provide them with more training. Despite all that, according to the Transport Canada rules, no one can get a commercial pilot's license without 200 hours of flight time. It does not matter whether they have the skill and are ready to work in the industry.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you.

My next questions go to all the witnesses.

Canadian universities operate with a system in which tuition fees vary with nationality. So tuition fees are lower for a Canadian than for a foreign student.

Can you tell us about the tuition fee system used in your schools? How are those fees established? Do the fees vary according to a student's nationality?

[Richard Foster]

I can speak only for L3 Technologies. We do not have schools in Canada, but we do offer major scholarships for women and for minorities in the United States and we have programs in Europe. L3 will sit down with the students, after they've been selected to show that they have the aptitude to go through the program, and work through financing solutions with them, and also reach out to the banks and provide collateral loans against their loans. We're actually, in some ways, helping finance them to get through the course, which means we have a vested interest in their success.

[Capt Michael Rocha]

We're currently not offering flight training for international students, but I do know that in industry, one of the trends right now is that international students are generally paying more overall than what some of the Canadian pilots are paying, but it's having an adverse effect. Some flight schools now are primarily catering to only the international students and are making it even more difficult for the Canadian pilots to actually get training, because, from a business perspective, that's paying their bills, so they're going after that market.

[Martin Hivon]

We are in the same situation. We do not have foreign students registered in a formal program, though we do not turn those students away. I mentioned the shortage of instructors, which is a problem we have to face. It exists because some schools have specialized in training programs designed for foreign students. They come to be trained in Canada and then they go back to their own countries. I know for a fact that those students pay a lot more for their training. The schools can then probably provide their instructors with higher salaries than we provide to ours. In fact, the average Canadian student is not in a position to spend what a foreign government is prepared to pay to have its students trained.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

There's another company called Cargair that has a partnership with Caisse Desjardins to help students obtain funding.

Are any of you, in any way, connected to any financial institution, or are you thinking of connecting yourself with a financial institution so that pilots, as well as future student pilots, can have some leeway with respect to payment?

[Martin Hivon]

I can go first, if you like.

It is interesting that you raise that question, because we are in fact in discussions with officials from the Caisse populaire Desjardins de Rivière-du-Loup to see how we can get easier access to financing for students who want to take a commercial pilot's course. I am not sure how those discussions will end, but there does seem to be some openness.

We also provide courses for those who want a private pilot's licence, as a form of leisure activity. These are people who have decided to take flying lessons instead of buying a snowmobile. However, I am really talking about the training for students who want to become professional pilots and work in the industry. Currently, it is very difficult for them to obtain funding.

[The Chair, Liberal, Judy Sgro]

Thank you.

Monsieur Aubin.

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

Thank you, Madam Chair.

My thanks to the witnesses for joining us this morning.

Let me start with you, Mr. Hivon. Under the previous government, we watched Transport Canada become progressively disengaged from a number of sectors including aviation, with certain responsibilities offloaded to NAV CANADA, for example.

Your flying school interests me particularly because it is located in a region; it could be part of the solution to the problem of noise around large airports, which our committee has just studied. If NAV CANADA decides to no longer offer instrument flight services at your airport, is it possible to challenge that decision?

[Technical difficulties]

I will turn to the other witnesses and hope that we will be able to get the video link with Mr. Hivon back.

Mr. Foster, your third recommendation is to consider different business models in Canada. You started to tell us about Lufthansa, for example. I was wondering whether there is a preferred model that you could share with us.

[Richard Foster]

I think that if Air Canada were to recruit and train right from the get-go, that would be ideal. I'm not sure if they're prepared to do that.

Another model would be to employ L3 Technologies or a company like CAE, which has the resources and infrastructure and would do the selection process for them and help them build the financing requirements.

We're affiliated with the banks in the United States that provide the collateral risk for students based on the selection that we do because the guaranteed success rate of those students is much higher. What you don't want is a student who goes into a program, thinks he wants to be a pilot, pays all that money, gets the loans and is not successful. That's what I think Canada needs to wrestle with, the model of how we've recruited for aviation in the past, and how to solve the problem of the airline industry, which is hoovering up all the instructors and all the pilots who are coming out of the schools.

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

Mr. Rocha, my question for you is on the same subject.

In your opening remarks, you say that a lot of students begin their training courses but do not finish. The issue of paying for the studies is clear to everyone around the table, I believe. So I am trying to understand why students who are aware of the costs of the training would start it if they know they cannot pay for it. Do people quit the program for financial reasons only or because it does not meet the expectations they had at the start?

[Capt Michael Rocha]

It's a good question. There are two parts.

For the commercial student, someone who's endeavouring to become a professional pilot, those success rates and completion rates are a lot higher than for the general aviation public, who are just coming in to do a private pilot licence. Those people come in with an expectation that it will be all fun and all easy, but when they get involved in the actual program, they realize it is quite a bit of work and commitment. That's where you have a lot of people who don't complete the private pilot licences.

Transport did introduce the recreational pilot permit, which alleviated some of that. It made the private licence a lot easier. One of the things I was going to suggest, on advanced ultralights that have come into the market and are out there for people who are trying flying, is allowing more credits or adjusting the ability for advanced ultralight time to be applied further. If somebody decides to start in as a candidate for a private pilot licence, they can get in at relatively lower cost, and then they may enjoy it so much that they want to go on and pursue it as a career later on. They can then go on to things like what Mr. Foster's suggesting, where you can go into a simulator-based...and things like that. Overall, I think people come in with an expectation of what it's going to be and then realize it's not.

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

My last question goes to all the witnesses and I hope that Mr. Hivon will be able to join us.

Are there statistics on the number of Canadian students registered in flying schools? What percentage of those students are retained? In other words, how many trained students will go to work for a foreign company rather than serving Canada?

[Richard Foster]

I do not have that information but I will see if I can find it.

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

I will ask Mr. Hivon when he comes back.

[Martin Hivon]

I am back, but I don't think that you could hear me.

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

Yes, I can hear you loud and clear. Did you hear the end of the question?

[Martin Hivon]

No. The connection cut out in the middle of your question. However, I understood that you were talking about NAV CANADA, which really interests me.