Transport Committee on Feb. 19th, 2019

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

We deal with people with student loans all the time, whether it be an issue of forgiveness or interest relief. They're unable to pay; they're unable to get that job to begin with. It seems to me now, in this particular industry, that this is not as big an issue unless you get over that slave wage issue, and then you're on to something that has better pay.

The other part of it is the school itself. In addition to getting the financing to get the kids in there, what relief is needed for the schools, the private schools, to allow them to attract more students? One of the issues in the school that you represent is that there's a large population of international students there.

[Mike Doiron]

Yes, very much so.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Now we have whole other issues with that school with regard to getting them to transition from students to people in the workforce here in Canada. I'm not specifically asking about that issue, but what help can be provided to the school itself?

[Mike Doiron]

I think, once again, it comes back to supporting the infrastructure, like you were talking about, making it easier for the flying schools to effectively operate on a day-to-day basis. One of the elements that we're looking at right now at Gander is the purchase of two very expensive flight training devices to assist us in both the flying school and the airline.

So, anything that can be done to support flying schools right across the country in being able to purchase those units, either through low-interest loans or whatever the case may be, anything that can be done in that regard to support these schools, would be a major step in the right direction because that's one of the things that I find in a lot of cases.

I know that when I was running my own school, we were dealing with the bank, and some of the loans that they were throwing at us were pretty expensive to say the least. We were unable to buy certain things that we felt would have been of major benefit to the students' training and their ability to actually complete the training in a reasonable time.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

So, financing capability from, say, an economic development agency similar to what we have in Atlantic—

[Mike Doiron]

It would be through ACOA, for example.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

—which would be the Atlantic Canada Opportunities Agency. That certainly goes a long way or has gone a long way towards the school. In GFT's case, you have a situation in which you have two entities on the move here, which would be, one, the school, and two, the actual airline that's doing the flying.

[The Chair, Liberal, Judy Sgro]

That's right.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

The transition is great, and that allows them to get into the workforce more easily.

How about when it comes to—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Simms. We're just about out of time.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Oh, that's my life story, Madam Chair.

[Voices]

Oh, oh!

[The Chair, Liberal, Judy Sgro]

Monsieur Aubin, do you have an outstanding question?

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

No.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Sorry, was I just about out of time or was I out of time?

[The Chair, Liberal, Judy Sgro]

You were at five minutes, 34 seconds, and I was trying to make sure that Mr. Aubin, if he had a pressing question, had an opportunity to get that on the record as well.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Oh, well, there you go. Understood.

[The Chair, Liberal, Judy Sgro]

Thank you to our witnesses. As you can see, this is an issue that the committee's keenly interested in.

Mr. Fuhr has joined us as well this morning. Thank you very much.

We will suspend for a few minutes until we have the other witnesses come to the table.

[The Chair, Liberal, Judy Sgro]

I am calling the meeting back to order.

With us by video conference, for Aviation MH, we have Martin Hivon, president and chief flight instructor from Rivière-du-Loup. Welcome.

From Central North Airways, we have Captain Michael Rocha, owner, and senior executive of the Central North Flying Club.

From L3 Technologies, we have Richard Foster, vice-president.

Welcome to our witnesses. Thank you for being here.

Mr. Hivon, if you would like to go first, please limit your comments to five minutes so that we'll have time for questions.

[Martin Hivon, President and Chief Flight Instructor, Aviation MH]

Great.

Madam Chair and members of the committee, thank you for the invitation to testify here today.

As the owner of a small flight school and the manager of a municipal airport, I believe I am quite aware of the different challenges facing flight schools in Canada. I do not want to sound negative, but given the fact that this committee is focusing on the challenges facing flight schools in Canada, I will limit my observations to the problems and not discuss what might still be going well.

You have all heard the statistics regarding the pilot shortage that has already started. What is in my opinion even more important is the fact that there are almost no flight instructors available anymore.

If we are at the beginning of an important shortage of pilots, how are we going to train the required pilots if we are already out of flight instructors? One of the traditional career paths for young pilots was to obtain their commercial licence and then become flight instructors for a few years in order to gain experience. New pilots are now bypassing this path, because they get hired by companies that are short of pilots right after they obtain their licence.

When I hired my first flight instructor a few years ago, I chose to offer him much better than average industry conditions. I paid him a decent salary on an annual basis in order to provide a more stable income and better overall quality of life. This strategy worked well for both the company and the instructor. Despite these conditions, I have been trying to find a new full-time flight instructor for four months now, and I have not been able to get one single resumé, let alone hire somebody.

Some would suggest that the free market will always win, and if flight schools were to pay flight instructors even better—a lot better—then some pilots would choose to become flight instructors. However, by doing so, we would have no choice, as businesses, but to pass on these additional costs to the customer.

lt is already financially difficult nowadays for the average would-be pilot to afford a quite expensive training. The problem would then be pushed towards the rest of the aviation industry. The pilot shortage would become even more critical, because fewer candidates would be able to afford the training. The lack of instructors, in my view, is the number one challenge we are facing now.

The second challenge facing flight schools is something that you may or may not have heard about yet. The federal government and Nav Canada are concentrating all the services they offer on the major airports in Canada. These airports are already quite busy and cater mostly to major airlines. A few exceptions, like Saint–Hubert airport near Montreal, which are not the destination of major airlines, are operating at full capacity already.

One would think that it would be simple and logical to move some flight training activities away from major centres. This would alleviate congestion problems and noise problems, for example. However, flight schools like mine that operate away from these major centres must operate on smaller aerodromes that are not supported by Nav Canada and/or the federal government. These aerodromes were ceded to the municipalities in 2003, over 15 years ago, and are now in serious need of infrastructure work. The municipalities that own them simply cannot afford these required upgrades.

Nav Canada is also shutting down services at an alarming rate. Navaids and instrument approaches are no longer supported by Nav Canada, and both navaids and the approaches are being decommissioned at all but the major airports. How are we supposed to train new pilots if the major airports are overcrowded and the smaller ones no longer have the infrastructure required to support flight operations and flight training? We can train private pilots without access to conventional navaids and instrument approaches, but we cannot train professional pilots without them. lt is another serious problem that has been creeping up for quite a few years now, and it is not getting any better.

My third and last point has to do with Transport Canada. lt is risky for a small school like mine to criticize the agency that controls all of our operations, but I believe this committee needs to hear about this other challenge that we face. Transport Canada should be part of the solution instead of being part of the problem. lt is getting more difficult every day to get any kind of services without delays at Transport Canada. This is true at every level of our operations. lt would seem that Transport Canada is seriously short-staffed. Some serious inefficiencies could be addressed first, and the overall situation would improve.

Another problem with Transport Canada is the need to update and upgrade the way they treat flight training in Canada. The current system is old if not completely archaic. For example, the entire system is based on the number of training hours. A competency-based training system would be a lot more efficient and could possibly reduce the overall cost of training pilots.

Written examinations produced by Transport Canada are mostly based on “catches” instead of focusing on what's important.

Finally, Transport Canada is too slow to adapt to new realities. For example, no professional pilot today navigates with a paper chart, and absolutely nobody navigates with a sextant. Despite this, Transport Canada refuses to allow modern tools like Foreflight, for example, in pilot training. It may still be important to at least be familiar with paper charts and old navigation techniques, but to simply refuse to allow schools to use and teach with modern navigation tools is quite simply unacceptable. We need to train pilots with the real skills they need today and the skills they will require tomorrow, not with the skills required 30 years ago.

Thank you. If you have any questions, I'd be happy to answer them.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Hivon. We appreciate your time and testimony.

Mr. Rocha, for five minutes, please.

[Captain Michael Rocha, Senior Executive, Central North Flying Club, and Owner, Central North Airways]

Thank you, and I agree with what Mike and Martin have said as well.

My name is Michael Rocha. I'm an airline transport-rated pilot and a class 2 flight instructor. I have a multi IFR rating. I'm type-rated on many different aircrafts: Q400s and Embraer jets. I have flight instruction and charter experience. I have also worked and currently work in the airline industry as a pilot.

I grew up in Brampton. I was fortunate to attend a high school aviation program that had five courses specific to aviation. It was a great opportunity for me. I went on to engineering and did transportation engineering with a focus on aviation.

I started working at Toronto Island and from there went back to Sudbury and opened up a flight school. I was approached by an investor who wanted to do the flight school. At the time, I felt the airport was not a great airport to do business at, so we basically opened up our own airport. Some of our initial challenges were insurance costs. We started right after September 11 and had insurance cost quotes that basically tripled from before September 11 to after September 11. We had to manoeuvre regulations within Transport Canada, the start time, the time that it took from when we wanted to start until we actually started. While you're doing that process, you have aircraft sitting on the ground, waiting and not generating any revenue. The cost of the flight training for the students was and is still a concern today. Student completion rates were also a challenge, as a high number of students start flight training and do not finish.

Once we did get started, we were able to offer all the flight training licences available. We could offer private, commercial, multi IFR and night instructor ratings. We had no issues getting instructors. People were basically dying to work, and instructors were willing to work for very little money, because for them it was a way to build their hours. It was not an issue. There were lots of instructors.

The student demand was present in northern Ontario. We had a lot of private ownership of aircraft in northern Ontario. We had generational students. Dad owned an airplane, so the son was going to learn to fly and take over the aircraft. We had a good general aviation community at the airport. We had a Sudbury flying club with lots of members. It was a place where people could go to the airport if they just wanted to poke their nose in and see what aviation was all about. There was a place where they could go and walk in, and there would be a bunch of pilots hanging out, drinking coffee and shooting the breeze about flying.

That was what was going on there. Flying clubs existed at our airport. They no longer do. We were fortunate to do fairly well with the flight training. We expanded into the charter operation, but it was not an easy business. It's a highly regulated business. There are low margins and small volumes. We were able to survive based on the fact that we had the private pilots sector, the people who were just doing their private licences, plus we were able to get commercial students.

We were able to train our own instructors. If students came in, we could basically offer them a job. If they did their private and commercial licence, and went on to do their instruction rating, we could tell them right there, “Yes, we're going to give you a job and we'll hire you,” which we did with many of our students.

The pilots who were living in the Sudbury area could train in the Sudbury area. They could do their private and commercial licence, live at home and do their training. At that time there were 352 flight schools in Canada and over 100 in Ontario alone. What changed?

For us, one of the biggest factors that changed was that the Ontario government decided it wanted to oversee and regulate the flight training industry. When that happened, the rollout, in my opinion, was poor. Businesses had to deal with it. Schools were initially able to pay the fees, because it was just a course fee to cover the commercial and the instructor rating course. Then the government demanded audited financials. The cost became prohibitive to the schools that did not have a large commercial student base.

Schools in northern Ontario did not have enough commercial instructor ratings taking place to cover the costs of the audited financials and the course costs. As a result, we were no longer able to offer those courses, so we lost a lot of our full-time student base, people we were going to train every single day.

Small schools lost a significant student base, and then a lot of the students who wanted to continue in commercial training had to travel elsewhere to do it. That was a big problem. The instructors followed, because if you didn't have the student base, the instructors would go where the employment was.

Another thing we noticed was the airport funding. As my colleague previously mentioned, we did not have an airport that was investing heavily into the general aviation community. The focus was passenger traffic and not student traffic. When the club got moved over into a different space, it basically went dormant and we lost that general aviation community.

The other items were Transport Canada oversights, the flight tests and the funding for Transport Canada. We have a Transport Canada office in Sudbury right now that's actually going to be closing. That's a service that is really valuable, in that you can get your flight tests, licence and written test done right there. Where are we now? Today we only have 148 active schools and there are only 43 in Ontario.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Captain. I'm sorry, I have to cut you off at this point. I'm sure you can get the rest of your comments in.

Mr. Foster.

[Richard Foster, Vice-President, L3 Technologies]

Good afternoon, Madam Chair and members of the committee.

L3 Technologies develops defence technologies and advanced commercial solutions for pilot training and aviation safety. In this country, L3 Technologies currently employs more than 2,200 Canadians, and the company is continuing to grow.

L3 Technologies estimates that 151,000 new pilots will be needed around the world in the next five years, an average of 30,000 per year. For reference, the industry trained about 20,000 pilots in 2017.

This committee will find it interesting that our airline academy programs are constructed to assist airlines with receiving well-trained pilots. In Europe, we conduct the recruiting, selection and training processes that will guarantee successful candidates a right seat with a paired airline operating with the European Aviation Safety Agency; easyJet and British Airways are two examples.

At our airline academy in Florida, we have over 780 students, 104 aircraft and a yearly flying rate of 130,000 hours. Two-thirds of the students are foreign nationals. There are no Canadians at the moment.

Due to FAA requirements to achieve air transport licenses, L3 offers graduates the opportunity to remain in our schools to become instructors and achieve their required hours. While we cannot guarantee placement to airlines in the U.S., our recruiting and training standards are well respected and the hiring rate of graduates by airlines is high.

In both of these programs, the largest barrier to producing more pilots is cost. Students are required to finance themselves. We do provide assistance and have government as well as commercially backed loans. There are also several scholarship programs.

Although the financial burden to the student remains high, L3 provides a thorough screening selection on students to maximize the success rate as we assume some of the financial risk.

L3 Technologies owns Dawson Aviation in Pueblo, Colorado. Since 2006, Dawson has provided initial flight training for all United States Air Force student pilots, combat system operators and remotely piloted aircraft operators. More than 15,000 USAF students have passed through since inauguration. This program consolidated initial flight training that had been farmed out to 183 local schools across the United States. The decision to consolidate the program into one school and to be more closely supervised by the USAF was a result of a series of accidents at several civilian flight schools that had difficulty ensuring appropriate technical and safety standards.

All these programs highlight the requirement for a critical mass of resources and infrastructure. Flight safety and flying and maintenance standards must be observed. In addition, a constant source of flying instructors and aviation maintenance personnel must be provided. The student selection process must be rigorous and they must be provided with sound advice and financial assistance. It must also be possible to invest in the latest simulation and aircraft technology, so that training is aligned with airline requirements.

Our first recommendation is to develop a national strategy. This problem in Canada is not going to solve itself and our airline and global aviation businesses are creating that demand. An appropriate training pipeline needs to be developed for the recruitment and selection of students to maximize success for the investment made, one that promotes and increases women's, indigenous and minority representation; that provides financing options including government assistance; that enables a critical mass of resources and infrastructure to provide up-to-date training and solid flight safety practices; and that is in direct alignment with the airline and global business requirements.

Our second recommendation is to directly involve the major airlines, global aviation business community and government in the development of a solution. The major airlines and global aviation businesses are creating the demand and have a major stake in how any strategy should roll out. These entities should be involved in the development of a national strategy. Their requirements will frame the national strategy solution and government will be better placed to understand how they can help. L3 Technologies would welcome the opportunity to participate.

Our third recommendation is to consider different business models that will enable the national strategy. As demonstrated with the European Aviation Safety Agency example, L3 provides guaranteed right seat placement with an airline. Finding the right business model for Canada is important.

All stakeholders need to be involved and must work together to find the right solution. If we as Canadians want to remain competitive in a rapidly changing technological global environment, where regulation and standards will only increase, then we must work together to find a national strategy for Canada.

I would like to thank the committee members for their interest.

I am ready to answer your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Ms. Block.