Evidence of meeting #69 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was c-49.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Cam Dahl  President, Cereals Canada
Bob Masterson  President and Chief Executive Officer, Chemistry Industry Association of Canada
Jeff Nielsen  President, Grain Growers of Canada
Kara Edwards  Director, Transportation, Chemistry Industry Association of Canada
Fiona Cook  Executive Director, Grain Growers of Canada
Pierre Gratton  President and Chief Executive Officer, Mining Association of Canada
Joel Neuheimer  Vice-President, International Trade and Transportation and Corporate Secretary, Forest Products Association of Canada
Karen Kancens  Director, Policy and Trade Affairs, Shipping Federation of Canada
Brad Johnston  General Manager, Logistics and Planning, Teck Resources Limited
Sonia Simard  Director, Legislative Affairs, Shipping Federation of Canada
Gordon Harrison  President, Canadian National Millers Association
Jack Froese  President, Canadian Canola Growers Association
Steve Pratte  Policy Manager, Canadian Canola Growers Association
François Tougas  Lawyer, McMillan LLP, As an Individual
James Given  President, Seafarers' International Union of Canada
Sarah Clark  Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.
Jean-Philippe Brunet  Executive Vice-President, Corporate and Legal Affairs, Ocean
Martin Fournier  Executive Director, St. Lawrence Shipoperators
Mike McNaney  Vice-President, Industry, Corporate and Airport Affairs, WestJet Airlines Ltd.
Lucie Guillemette  Executive Vice-President and Chief Commercial Officer, Air Canada
Marina Pavlovic  Assistant Professor, University of Ottawa, Faculty of Law, As an Individual
David Rheault  Senior Director, Government Affairs and Community Relations, Air Canada
Lorne Mackenzie  Senior Manager, Regulatory Affairs, WestJet Airlines Ltd.

5:55 p.m.

Executive Vice-President and Chief Commercial Officer, Air Canada

Lucie Guillemette

In the case of Air Canada, we have a similar buffer zone and we also ask our crews to speak to passengers surrounding the individual who may have an allergy. We've taken very similar steps.

5:55 p.m.

Liberal

Gagan Sikand Liberal Mississauga—Streetsville, ON

Thank you for your responses to my questions.

5:55 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

Mr. Aubin.

5:55 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Thank you, Madam Chair.

My thanks to all the guests for joining us this evening.

Many aspects of Bill C-49 bother me, some of which deal with the air component.

My first question is for the Air Canada officials, not as a way to single out the company, but because the example I have in mind directly concerns them.

A few years ago, a joint venture agreement between Delta and Air Canada was being negotiated, if memory serves, and it was blocked by the Commissioner of Competition. The Commissioner of Competition ensures the safety of consumers and travellers. If the commissioner says that this agreement is not in their best interests, I'm fine with that.

In Bill C-49, the role of the Commissioner of Competition becomes advisory and the minister may decide to override his recommendations for reasons he deems valid. Does this mean that it would be possible to establish joint venture agreements—to which I'm not fundamentally opposed—that the minister deems valid, but the Commissioner of Competition does not?

6 p.m.

Senior Director, Government Affairs and Community Relations, Air Canada

David Rheault

It is difficult to speculate and foresee situations that have not happened yet.

6 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Let me ask you a concrete question. Will the agreement with Delta be reinstated if the Commissioner of Competition is no longer an obstacle?

6 p.m.

Senior Director, Government Affairs and Community Relations, Air Canada

David Rheault

Right now, the new system proposed by the bill provides for the involvement of the Competition Bureau, but also for clear authorization by Transport Canada.

The Competition Bureau will be involved and competition-related issues will be raised. However, the public policy principle means to consider the broader interests of air infrastructure development and the potential that those agreements can have.

We are convinced that the finest expertise in the matter is at Transport Canada, and the Competition Bureau, of course. However, given the fundamental importance of those joint ventures for the development of the Canadian industry, the department must consider the broader interests. Transport Canada is mandated to weigh all the factors and make good decisions.

There are statutory review mechanisms to ensure there is monitoring and conditions for authorization in place, to see what the outcome might be for consumers, among other things.

6 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

We can agree that it is not always a team effort. The commissioner has an advisory role.

I will now turn to you, Ms. Pavlovic. I quite agree with you that Bill C-49 does not have a passenger bill of rights, but outlines the general principles that might lead to the creation of one.

In your opening remarks, you said that there were omissions, even in the general principles that must guide the Agency in its consultations. What aspects are missing from Bill C-49?

6 p.m.

Prof. Marina Pavlovic

Thank you for your question.

I think it's very difficult to pinpoint very specific issues, because this is really a very broad list of issues. For the lack of better words, the devil is going to be in the details, in the way these issues are implemented. For me, and this may not necessarily be something my co-panellists agree with, ministerial discretion is very important, because new issues will arise and may actually arise after the bill has been passed, which will allow CTA to add them to that specific list.

One question concerning which I think some consideration may be warranted is whether there are any human rights issues that may be raised. We have seen a few cases—and there is currently a case before the Supreme Court of Canada, which is on a standing issue, not even on the substance—of overweight passengers who are asked to pay for two seats or are taken off the flight. Any issues that may impact human rights more than commercial or economic rights that are currently in the bill may warrant some exploration concerning whether some of these could be put into the bill of rights in the future.

6 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Thank you. I'm certainly interested in receiving your brief and your recommendations.

In the one minute I have left, I will turn to the representatives from WestJet.

At the Trois-Rivières regional airport, which is located in a municipality I represent, there have been plans for charter airlines heading south. However, it was impossible to carry them out because the security measures were not available. Those measures could have been available had the associated costs been paid, as mentioned in Bill C-49.

Do you agree with this double standard for airports, meaning that some have the services covered, while others have to pay for them?

6:05 p.m.

Vice-President, Industry, Corporate and Airport Affairs, WestJet Airlines Ltd.

Mike McNaney

It would be very difficult for me to admit in public that I endorse a double standard. Sometimes it happens.

Speaking seriously, though, to your question, as a general principle I go back to our brief and our statement that the totality of the ATSC should go towards screening, and it doesn't. You then end up with shortfalls across the system.

If you have a small airport, as in the example you've given, I don't think we want to be ridiculously strict on how things can go. If we can find another way to bring in service to that community and you can drive that connectivity, then perhaps that airport would pick up some element of the cost.

I think we have to have some flexibility. As a general principle, I would want all of the ATSC to go to aviation security. Then if we had to have something for smaller airports, or airports of a different size, as happens in the U.S., which has programs for airports in a given population area and for the number of carriers they get.... If we had to look at something like that, so that smaller airports could actually make a go of it, then I think we should do so.

6:05 p.m.

Liberal

The Chair Liberal Judy Sgro

We go on to Mr. Hardie.

6:05 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Thank you, Madam Chair.

Your story, when it comes to air passengers' rights, is a kind of good news, bad news thing. The bad news is that alarming stories come out in the media a few times a year. The good news is that they only come out a few times a year. For the most part, things go well.

But I have to ask what on earth is going on when you have a name on a no-fly list and it turns out to be a six-year-old kid and still the family cannot fly? What happened to that poor family who came to the airport with their kids, weren't allowed on the plane, and then were dinged another $4,000 the next day to get on a plane?

Is this a systems failure, or is it a customer service failure? What kind of training—and I'm sorry, I'm picking on Air Canada because they are the two that are most recent in memory, but I'm sure everybody has their moment.... What's going on there? Do you need government to step in and teach some common sense here?

6:05 p.m.

Executive Vice-President and Chief Commercial Officer, Air Canada

Lucie Guillemette

The answer to that is no. We don't need to be regulated to tell us to do the right thing. However, when you ask the question, is it a training issue, is it a tariff issue, or what is it? In those two particular cases, I don't think you're looking for the answer as to what happened in those specific areas, but the bottom line is that there are situations at times—those two, for example—that on the surface do appear to be pretty dramatic. When we fail and when it is our fault, if it's a training issue or we didn't use good common sense or good judgment, most often we are in contact with the customer as some of these stories unfold in the media. It doesn't make it right, but when we say that we want to improve, it's exactly what we mean.

I can't comment on the one on the no-fly list, because truthfully I don't have all the details, but in many cases, in some of the stories you read at times it is our failure, but at times, as you say, it's a training issue or it's a situation occurring in an airport environment, usually when there is a pretty large irregular air operation. I'm not suggesting that it makes it right, but again, the truth of the matter is that we are trying to improve these things, and to be honest with you, we're not at all opposed to having a set of guidelines under which to operate or to report on these situations. They are our customers and we need to do right by them.

6:05 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

I do submit that it's, in some respect, a corporate value sort of thing as to what you default to when something such as that comes up, but we'll move on.

Let's talk about joint ventures.

Ms. Pavlovic, joint ventures have been problematic over time. Some have been challenged, and we heard about one just this evening. To your mind, what triggers should the airlines be watching for when they're trying to put together a joint venture that would draw at least concerns about anti-competitive behaviour?

6:10 p.m.

Prof. Marina Pavlovic

I think your question is a little outside my area of expertise. I could comment broadly in terms of consumer interests.

6:10 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Please do.

6:10 p.m.

Prof. Marina Pavlovic

My view of the Canadian aviation marketplace is not necessarily the same as industry's, in the same way that my view of the telecommunications industry is also very different. I think we have almost virtualized monopolies. The restrictions on foreign investment in Canada are significant, and we don't have enough investment. If we could, probably the marketplace would be a bit more diversified and consumers would have more choice, but consumers have very little choice. Right now, there are few airlines that offer services, so this is pretty much what they can do, in the same way that in telecommunications there is some competition but not a lot.

I can't really comment specifically. There are different mechanisms in place, including the new process suggested that goes through the Competition Bureau and Transport Canada. In those kinds of instances, participation by public interest and consumer groups is really relevant to provide more targeted expertise as to what kind of impact that would have on consumers directly, but this is as far as I can really go with your question.

6:10 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

I have one final quick question.

What is the gap between the amount of money collected to pay for CATSA services and the amount of money actually spent on CATSA services? This question goes to some of your earlier comments about the cost-plus-plus regime that could be settling into place here.

6:10 p.m.

Senior Director, Government Affairs and Community Relations, Air Canada

David Rheault

I don't have the exact amount with me. We can provide that to the committee.

I know we did some analysis in our submission for the Emerson panel. I'm trying to go by memory, but I think it was at the time about $100 million, or something such as that, but I need to check and get back to the committee.

6:10 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Thank you.

6:10 p.m.

Senior Director, Government Affairs and Community Relations, Air Canada

David Rheault

Maybe I could just add that, over the last five or six years, Air Canada has collected almost $90 million more from its passengers on ATSC and remitted it to the government, so this is a significant amount of money.

6:10 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you.

Mr. Graham.

6:10 p.m.

Liberal

David Graham Liberal Laurentides—Labelle, QC

Thank you.

On competition, I just have to say that last week I flew to Kelowna on Air Canada and came back on WestJet. On WestJet, the granola bars are much better than the pretzels, so thank you.

I have a very quick question for you.

To build on Mr. Aubin's point, my riding has a number of airfields but one international airport, Mont-Tremblant International. It has seasonal service that's not very frequent. To get customs, it costs a fortune. Does CATSA cost recovery put airports such as mine in danger?

6:10 p.m.

Vice-President, Industry, Corporate and Airport Affairs, WestJet Airlines Ltd.

Mike McNaney

No, I don't think it does. If we are actually collecting the totality of the funds that are appropriate, then no, it shouldn't.

To the earlier question a few moments ago, CATSA, in the corporate plan submission—I'm not sure of the exact name of it—that it made to the government in July outlined that it's going to be facing further funding crunches, if the means by which it receives its funds are not consistent with how many passengers they're getting.

The biggest issue over the past several years—and in an equal effort, Madam Chair, to annoy both sides of the House, this was under Conservative governments and under Liberal governments—is that for many years this funding has not reached the level it should. You've had a multi-year experience of passenger counts across the country increasing. WestJet has been exponentially increasing its capacity in the market, Air Canada has, Porter Airlines has, Air Canada carriers have through Air Canada's capacity purchase agreements. A heck of a lot more people are flying today than was the case even 10 years ago. What hasn't kept pace with that is the CATSA funds actually flowing on a one-to-one basis. You pay it; it goes into security.

For your smaller airports, then, what you face is to some degree the reality of the policy for the past five to six years whereby CATSA has been starved of the totality of its funds. If you change that system, then perhaps you have to look at some top-ups.

It has happened on a per-budget basis that you look at some top-ups for smaller airports. Again I go back to the United States, which has a very different model, but the United States' federal government does provide direct financial support in a quantum exponentially beyond anything we do in Canada for small regional airports. It's probably something we should take a look at from the standpoint of the economic development that this then unleashes.

Thank you for your earlier comments. We're going to put that on Youtube as an ad.