Transport Committee on Sept. 13th, 2017

[Vance Badawey, Liberal, Niagara Centre, ON]

Good. That's a careful answer. Thank you.

Going to the business part of it, right now, as I mentioned earlier in this dialogue from the past few days, we've been teasing out not only those issues having to do with Bill C-49, but ultimately ways that Bill C-49 can contribute to the broader national transportation strategy, especially the strategy that has been outlined by the minister—the trade corridors strategy not only for moving goods but also moving people globally.

How do you see this bill, from the standpoint of your industry, being integrated with other methods of transport in the movement of people and goods to better position Canada with respect to that resource being available to the consumer, to the customer, whether it be business or the daily traveller?

[Mike McNaney]

That's a good question, and I can honestly say we didn't prepare for that one beforehand.

I would go back to some things from the earlier questions in terms of establishing overall expectations for consumers and creating a bottom-level base that the industry has to adhere to from a service standard viewpoint. There's some utility in that.

In terms of the broader corridor issues, I don't think there's much, to be honest. I think some of the other issues we've talked about that are not in this legislation would speak to this—some of the accountability issues we've talked about from other levels, with other actors involved, and I think some of the comments that were made a few moments ago about recognizing aviation as a commercial enabler.

By and large, I don't get the sense that we are necessarily seen as a commercial enabler. We are the only mode of transportation that has 100% user pay. I look at some of the other modes and the way they are governed and the extent to which public funds are made available to them, and that doesn't occur with our sector.

If we wanted to actually drive those corridors further and commercial aviation were to play a strong role in that, we should look at some of the policies that exist for these other modes of transport under this rubric and see whether we can apply them to aviation.

[Vance Badawey, Liberal, Niagara Centre, ON]

That's a good point. I'll put out the request that you folks go back, and when we take this to the next level—pass Bill C-49—start looking at satisfying some of the recommendations that are contained within the strategy overall and at how the airline industry can integrate data, or logistics and distribution of goods globally, or even the movement of people. How can you participate and as an enabler add to Canada's being better positioned because we have that proper transportation infrastructure in place?

Thank you for that.

[David Rheault]

To answer that question with respect to Bill C-49, I think the review regime that is proposed for joint ventures is very positive. This can help to develop Canadian infrastructure and develop new gateways through Canada to open our country to the world and enhance the movement of passengers and goods.

[Vance Badawey, Liberal, Niagara Centre, ON]

Great. Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Block.

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

Wow. I didn't realize it was my turn already. Thank you very much for that.

I want to ask a question of Air Canada.

In your submission, on your last page in your conclusion, you state:

Air Canada, therefore urges caution and asks the government to strike a balance with the implementation of Bill C-49 so as not to put Canada or Canadian airlines at a competitive disadvantage.

Do you believe that Bill C-49 has done this?

[David Rheault]

No, we don't believe that. What we basically say in our submission is that we are in a very competitive environment, which is worthwhile, yet the principle of Bill C-49 to have some established compensation and a certain regime also has to take into account the broader issue of the competitiveness of the industry.

This is a submission we would be making in the consultations for the drafting of the regulation, because we believe that the regulation should take into account also the competitiveness of the industry and the circumstances in which these regulations should be applicable when you compare them with what has been done in other jurisdictions.

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

I'm going to see whether I heard you correctly.

You believe that Bill C-49 does strike the right balance in terms of continuing to ensure that there is a competitive advantage for your airlines.

[David Rheault]

I'm sorry if I didn't express myself clearly.

Basically what we said is that the way the balance will be struck will depend on what the regulation is and at what level of compensation and in which circumstances you will apply it. What we say in our submission is that you have to be conscious, when you establish those levels, that they might have an impact on competitiveness.

When Bill C-49 was tabled, all public statements from the minister were clear that the intent was not to put at stake the competitiveness of the air industry. This is a message that is well noted by us, because we operate in a very complex and competitive environment and we want to make sure that the regulations that will implement Bill C-49 take that message into account.

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

Okay.

You've also stated in your submission that changes would be required to the definition of “Canadian” in Bill C-49 to ensure that the policy objectives underlining the new foreign ownership rules are met. Can you tell us more about that? How would you want to see that definition change?

[David Rheault]

That's a very good question.

We have proposed some wording in the annex of our submission. Basically, we want to add the notion of “owned directly or indirectly by a foreign entity” or the notion that a foreign entity cannot be affiliated or be acting in concert. These notions are taken from other corporate law to make sure that the intention is to place certain limits on foreign ownership, but we want to have language that clarifies those limits and that makes sure the intention is not circumvented or that some entity could not do indirectly what they could not do directly, if I'm clear.

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

Yes, we—

[David Rheault]

Maybe I should state it in French so the translator could get it better than me.

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

No, often we have been admonished in the House for trying to do that very thing.

I think that's it for my questions, Madam Chair.

I want to thank you again for being here.

[The Chair, Liberal, Judy Sgro]

Mr. Aubin.

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

I will once again turn to the Air Canada representatives.

I just want to make sure I understand one of your first recommendations. You talked about streamlining the system and making it more efficient by applying it only to flights that leave Canada, as is the case in the U.S. system, which is limited to flights that leave the U.S.

Let me use my last trip as an example. I was going to Rwanda. Let's say that, as a consumer, I go to Air Canada to buy the ticket, and since there is no direct flight, I have to go through Brussels. Does this mean that, because my departure is from Canada with Air Canada, you will be responsible for me all the way? If I were denied boarding in Brussels, not on the Air Canada flight, would I have to talk to you or the people in Brussels?

[David Rheault]

First, the system must apply to flights that leave Canada. The NEXUS program, which is linked to Canadian jurisdiction, is the simplest. When you come back, say, from Belgium, the European system is in force. If two systems are in force for the same flight, the situation becomes complicated for passengers and complex to manage for the carriers.

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

What happens if I have a problem with my connecting flight in Brussels, not when I leave Montreal?

[David Rheault]

If you have a problem in Brussels, it will be handled under the European regulations already in force. You will have to deal with the airline operating the flight.

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

Even though Air Canada sold me the ticket, as part of its joint venture?

[David Rheault]

Yes. The European regulations specify that it is the responsibility of the air carrier operating the flight because it is in charge of the operation. We would like to see an amendment that incorporates this principle—which is already in force in European regulations—into Canadian regulations.

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

Thank you.

I will now turn to Ms. Pavlovic to discuss the bill of rights.

It seems to me that we don't have to reinvent the wheel when it comes to creating a bill of rights. A number of countries have done it before us.

Is there a particularly compelling model from which we could draw inspiration to draft our own Canadian bill of rights?

[Prof. Marina Pavlovic]

Let me first just add something on the geographical links.

Limiting it to flights that depart Canada would make sense if every other country in the world had equivalent protection. The European Union does, but there are a hundred other countries that do not have equal levels of protection or do not have any protection.

By doing that, we then exclude a number of people from any kind of protection. I think it's very important, and again the devil is going to be in the details to figure out how we're going to operate it, but there is really no uniformity across the world.

To your actual question, I think the European Union directive is a good start. It is not fully transferable to Canada, and we ought to be careful about importing things that work in one jurisdiction to other jurisdictions, but I think they have spent much more time thinking about this than we have, and we can learn certainly from their successes but also from their mistakes.

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

Mr. Rheault, would you like to add anything?