Transport Committee on May 9th, 2019

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

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

Welcome to everyone.

We gather today to study three departmental plans for agencies that fall under the purview of the Minister of Transport, as well as the main estimates 2019-20.

A number of votes were referred to the committee for discussion on Thursday, April 11, 2019, namely votes 1 and 5 under Canadian Air Transport Security Authority; vote 1 under Canadian Transportation Agency; votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50 under the Department of Transport; vote 1 under Marine Atlantic Incorporated; vote 1 under the Federal Bridge Corporation Limited and vote 1 under VIA Rail.

We are delighted to welcome the Honourable Marc Garneau, Minister of Transport, along with his officials. They are Michael Keenan, Deputy Minister; Kevin Brosseau, Assistant Deputy Minister for Safety and Security; Anuradha Marisetti, Assistant Deputy Minister for Programs and André Lapointe, Chief Financial Officer.

For the Canadian Air Transport Security Authority, we have Mike Saunders, President and Chief Executive Officer, as well as Nancy Fitchett, Acting Vice-President for Corporate Affairs and Chief Financial Officer. Welcome back.

For the Canadian Transportation Agency, we have Scott Streiner, Chair and Chief Executive Officer, and Manon Fillion, Secretary and Chief Corporate Officer.

For Marine Atlantic, we have Murray Hupman, President and Chief Executive Officer, and Shawn Leamon, Vice-President of Finance.

Finally, for VIA Rail Canada, we have Jacques Fauteux, Director of Government and Community Relations.

Welcome, everyone, to our committee. Thank you for coming.

I'll start the discussion by calling vote 1 under the Canadian Air Transport Security Authority.

Minister Garneau, it's over to you for five minutes. I know that you're not feeling well today, and we really appreciate the fact that you're here with us today.

[Marc Garneau, Liberal, Minister of Transport]

Thank you very much, Madam Chair. I know that people would have been very disappointed if I weren't here today.

[Voices]

Oh, oh!

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I'm delighted to be here today. If I occasionally cough and splutter, please don't worry. I'm alive and well. I don't want to make a habit of having a cold when I come here, but I am fine. Thank you.

Madam Chair and members of the committee, thank you for the invitation to meet with you today. I am joined by the people you have already mentioned.

There is a great deal of important work being done in the federal transportation portfolio, which includes Transport Canada, crown corporations, agencies and administrative tribunals.

Regarding this year's main estimates, I will begin by mentioning that for the fourth year Transport Canada is involved in a pilot project, as we assess how effective it is to link grants and contribution votes to their purpose.

To help the parliamentary study of the estimates and the scrutiny of government expenditures overall, planned Transport Canada expenditures are presented in the main estimates for 2019-20 in accordance with the department's results framework.

The overarching goal at Transport Canada is to ensure that our transportation system is safe and secure, efficient, green and innovative. We work towards this goal by proposing laws, policies and regulations; monitoring and inspecting the transportation industry to ensure that these laws, policies and regulations are respected; and funding projects to strengthen the transportation network. We also collaborate with a variety of partners, including indigenous peoples, industry, provincial and territorial governments, and international bodies.

Transport Canada's main estimates for 2019-20 total $1.86 billion. That total can be broken down into four categories, which are $879 million under “Efficient Transportation”, $374 million under “Safe and Secure Transportation”, $252 million under “Green and Innovative Transportation” and $194 million for “Internal Services.” There is also $162 million for new budget 2019 items.

This is an interesting and exciting time for transportation in Canada. Innovation is delivering new opportunities and new challenges. In response, we are allocating resources to address these challenges, and we are always seeking ways to take advantage of new opportunities to make transportation safer, more secure, and more efficient, with less impact on the environment.

Budget 2019 announced a $300-million commitment for a new incentive program for zero-emission vehicles to help us achieve our targets for new light-duty vehicles in Canada of 10% by 2025, 30% by 2030, and 100% by 2040. The first portion of that amount, $71 million for the 2019-20 fiscal year, is included in these main estimates.

Transport Canada is also requesting $2.1 million in these main estimates for protecting critical cyber systems in the transportation sector. Budget 2019 announced more than $12 million over three years to implement the modernized Motor Vehicle Safety Act. This includes using fines to increase safety compliance, and more flexibility to support safe testing and deployment of innovative technologies.

Budget 2019 also allocated nearly $46 million dollars over three years to support innovation and modernization of Transport Canada's regulatory regime. This would affect commercial testing of remotely piloted aircraft systems beyond visual line of sight, cooperative truck platooning pilot projects, and an enhanced road safety transfer payment program.

I will also provide some highlights from these main estimates for federal agencies and Crown corporations in my portfolio.

The Canadian Air Transport Security Authority (CATSA) is seeking $875 million, to continue to protect travellers with effective, consistent and high-quality security screening.

Budget 2019 included $288 million for fiscal year 2019-20, to continue securing critical elements of the air transportation system, to protect the public.

Budget 2019 also announced our intention to advance legislation that would enable us to sell the assets and liabilities of CATSA to an independent, not-for-profit entity. The funding envelope for 2019-20 includes transition resources to support this corporate structure change.

Marine Atlantic is seeking nearly $153 million for year-round constitutionally mandated ferry service between North Sydney, Nova Scotia, and Port Aux Basques, Newfoundland and Labrador, as well as non-mandated seasonal service between North Sydney and Argentia, Newfoundland and Labrador.

Marine Atlantic brings more than a quarter of all visitors to Newfoundland, and two-thirds of all freight, including 90% of perishables and time-sensitive goods. Marine Atlantic service is vital to the interests of companies that do business in that region and to the people who travel to and from the island of Newfoundland. Budget 2019 mentioned that we will extend support for existing ferry services in eastern Canada and will look to procure three new modern ferries, including one for Marine Atlantic.

VIA Rail Canada is requesting almost $732 million in these main estimates. As our national passenger rail carrier, VIA Rail's objective is to provide a safe, secure, efficient, reliable, and environmentally sustainable passenger service. ln addition to trains that run through the Quebec City—Windsor corridor, and long-haul trains between Toronto and Vancouver and between Montreal and Halifax, this also includes passenger rail service to regional and remote communities, some of which have no access to alternative year round transportation.

ln conclusion, the financial resources outlined in these main estimates will help these agencies, Crown corporations, and Transport Canada to maintain and improve our transportation system. Our transportation system is vital for our economy, and for our quality of life. It is vital for our safety and security. And by making improvements to our transportation system, we are making it safer and more secure.

And we are also creating good, well-paying jobs for the middle class, and ensuring a better quality of life for all Canadians.

I would now be happy to answer any questions you may have.

[The Chair, Liberal, Judy Sgro]

Thank you very much for that presentation, Minister Garneau.

We'll go now to Ms. Block for six minutes.

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

Thank you very much, Madam Chair.

I want to thank you as well, Minister, and your departmental staff, for joining us today.

Where does one begin with the opportunity to question you on the main estimates, the departmental report on plans and priorities and the Canadian Transportation Agency, as well as the Canadian Air Transport Security Authority? It feels like the field is wide open.

At first blush, Minister, it would appear that you have been very busy, but a closer look reveals that whether we're looking at legislation you've introduced, regulations that have been gazetted or the recent measures included in the Budget Implementation Act, much of the heavy lifting has been left to the department or to industry itself.

Take the numerous initiatives undertaken in the air industry. Consistently we have heard that the cumulative effect of these initiatives—regulations on flight duty time, the air passenger bill of rights, the recent creation of a new entity for security screening through the BIA and the tight timelines, for which industry must be ready—is overwhelming the industry's capacity to implement these changes in a safe and seamless manner.

On top of this, the industry is continuing to grapple with the recent grounding of their Boeing 737 Max 8 aircraft and the subsequent changes that have had to be made by the airlines to continue providing safe air service to Canadians.

I want to quote Mr. Bergamini when he was here at committee:

Now, as our industry is grappling with major operational challenges stemming from the grounding of the Max 8, the implementation of new flight duty times rules, and the impossible task of complying by July 1 with prescriptive new passenger rights rules, we are again confronted with a government-imposed deadline and process.

He was referring to the measures in the BIA.

Why, Minister, would you introduce this measure in the Budget Implementation Act at the end of a session, five months before an election, when the industry is already struggling on so many other fronts?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I would like to say that there are a lot of things happening in the airline industry, and we announced our intention to put a lot of these in place, I would say, years ago. In fact, the proper normal government process of consultation and gazetting has been a very long process, and the time has come in certain cases to go to Canada Gazette, part II, and put these regulations into effect.

First, it hardly comes as a surprise to the industry that we have wanted to address the issue of pilot fatigue. It's something that started under the Conservatives back in 2010, and it didn't get done by 2015. We carried on with it and are now putting it in place, so it hardly comes as a surprise.

Second, on the issue of passenger rights, we made it clear three years ago that we were going to come forward with that.

We're also adamant about issues related to accessibility for passengers.

These are all things we clearly indicated we would go forward with. We have consulted with industry, and now the time has come to put the results into effect. We feel that the timelines we are going to announce, and in some cases have already announced, are very reasonable.

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

My question was about the measures in the BIA that would create a new entity for security screening. Given all the other initiatives that the air industry is being asked to implement on very short timelines, I asked why you deemed it necessary to introduce this measure in the BIA with yet another very short timeline.

It's our understanding that it needs to be implemented by January 1, 2020, and we're going into an election in the fall. Can you please explain why you included this measure in the Budget Implementation Act?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

We did it because we feel very strongly about making the current CATSA into a not-for-profit organization, much as was done by a previous government back in the nineties in severing NavCan from Transport Canada, which has turned out to be an extremely successful model.

I will point out that there are differing opinions about this decision. The airline industry has expressed what you have said. On the other hand, the airports where this measure would be implemented feel very positive about the decision we have taken to move ahead with this not-for-profit version of CATSA.

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

You have stated that flying in Canada has not become more affordable for Canadians, despite this being one of your Transportation 2030 goals. With half the price of an airline ticket from Ottawa to Toronto being the result of direct taxes and surcharges, why is your government making air travel in Canada even more expensive with the imposition of a carbon tax, and have you costed what the cost of a carbon tax will be on the airline industry?

I need a quick response, please, because I only have 45 seconds left.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

We feel, of course—and this is a broader question—that it is important for us to address the issue of climate change. Of course, through the pan-Canadian framework we have given provinces the option of deciding how they would do it. For those that decided they would not, there would be a backstop, and with respect to flying, fuel surcharges would be imposed for provinces in which the backstop applies and where we're only addressing intraprovincial flying. We have not changed anything with interprovincial flying.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Garneau.

We will move on to Mr. Badawey for six minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair, and welcome to our committee, Minister Garneau. Thank you for being here today.

Mr. Garneau, I understand that you have just returned from the Great Lakes Economic Forum in Cleveland, Ohio, in your role not only as a minister but as chair of the Cabinet Committee on Canada-U.S. Relations, Trade Diversification and Internal Trade.

The question, and in particular as it relates to today's discussion in respect to the budget, is on how there continue to be investments to strengthen trade corridors domestically here in Canada. Are you continuing to have discussions with our U.S. counterparts to integrate and communicate those domestic trade corridor investments, and also, with that being done and completed, to ensure fluidity and hopefully see that they're also integrating a lot of their trade corridor investments so that movement does flow over the border in a seamless fashion, whether it be by road, by the Great Lakes, by air or by rail?

The reason I ask is that in our neck of the woods in Niagara, we see a lot of trade leaving our region and going into the States. Equally as important, if not more important, is that a lot of that trade is going through or coming from Niagara over the border and then going into, for example, the Port of New York, Staten Island, Manhattan or other ports, and then going international.

Therefore, there's the need to have that fluidity, especially when you're going over the border, whether it is road, rail, water or air. Are those discussions happening?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

In short, yes. The Great Lakes Economic Forum, which I attended yesterday, is, as you know, composed of nine American states that border on the Great Lakes, as well as Ontario and Quebec. This is a very useful forum, because we all have a lot of things in common.

As you point out, looming large in those interests that we have in common is how we make the trade corridors as efficient as possible. We're talking about a region that represents $6 trillion of economy and 100 million people. There are an awful lot of products that we want to get to the right place. The St. Lawrence Seaway is an essential element of that, and as you point out, there is rail, but we have under-exploited the maritime routing.

As you know, we in Canada are at the moment evaluating how we can make the St. Lawrence Seaway more efficient. It also, of course, goes through a region that you're very concerned about, the Niagara peninsula and the Welland Canal. We want to get more of the goods that are produced to markets in a quicker fashion. The people I met with from the Port of Cleveland and those nine American states, for example, want to get their products. Yes, they can use rail, but they also feel, as we do, that we can do better with respect to maritime traffic.

It is something that we are talking about and that we share in common.

[Vance Badawey, Liberal, Niagara Centre, ON]

I want to ask about the message to our American counterparts with respect to the USMCA and section 232, the tariffs. Obviously, that seamless trade corridor is binational, and eventually its final destination is most times international. Is it very well understood by our counterparts on the U.S. side that while we're making those investments, there still is a need for the USMCA to be dealt with and for section 232, the tariffs, to be dealt with in a positive fashion?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Yes, and that was one of the main messages that I carried yesterday to the audiences I spoke to. Yes, we want to ratify what we call the CUSMA, the Canada-United States-Mexico agreement, but at the same time there is a serious impediment, the steel and aluminum tariffs. I made it very clear that this presented challenges for us here in Canada, especially given the fact that we really only have about five to six weeks before Parliament rises. They understand that very well. They understand the importance of finalizing and implementing NAFTA too, and they share that commitment with us.

[Vance Badawey, Liberal, Niagara Centre, ON]

My last question, Madam Chair, has to do with the national trade corridors fund.

What kinds of successes are you seeing now, based on the investments that you've already made, and what are your expectations in the future with respect to the returns on those investments?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

So far we have committed funding to 39 projects. Some of those projects are in construction at this point, and we feel that they are going to make our trade corridors more fluid. Some of them affect Great Lake ports, such as Thunder Bay and Hamilton. Funding has been put put into both of those ports, and there have been other measures to keep the goods flowing as well as possible in those corridors.

We are currently in an open situation, in that we have another $750 million, and we have, since January 15, been inviting new submissions for consideration under the national trade corridors fund. This is highly solicited and extremely popular as a program to help do exactly what it says, which is to keep our corridors moving efficiently.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mr. Aubin.

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

Thank you, Madam Chair.

Madam Chair, I have a quick question for you since I don't want to waste any of the time I have to talk to the minister.

During the public portion of the meeting for committee business, will I have time to move the motion announced on Tuesday?

[The Chair, Liberal, Judy Sgro]

Yes, if you want to do it at the end of this portion of the meeting and prior to starting the second or at the beginning of the second portion, that's fine, Mr. Aubin.

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

That's perfect for me.

Good morning, Minister.

Thank you for being here. It is always a pleasure to see you. I hope to hear you say today that green intercity mobility is your top priority, along with the fight against greenhouse gas emissions.

In the budget, I see that VIA Rail Canada is asking for $731.6 million, $435.6 million of which will be for capital expenditures.

How should the average person understand the term “capital expenditures”? Is there anything in those expenses for a possible high-frequency rail (HFR)?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

The government subsidizes not only the price of VIA Rail tickets, but also the corporation's capital expenditures. It has a lot of equipment and stations that it has to maintain. That costs money.

We are still assessing the high-frequency train project. This project is separate from VIA Rail Canada's ongoing activities and responsibilities.

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

Thank you.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I know that you are interested in high-frequency trains.