Transport Committee on Nov. 9th, 2017

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

I'm calling the meeting of the Standing Committee on Transport, Infrastructure and Communities to order.

Good afternoon, everyone. We gather today to study the supplementary estimates (B) for the fiscal year ending March 31, 2018, referred to the committee on Thursday, October 26, 2017.

We have nine votes to consider today, namely: vote 1b under the Canadian Air Transport Security Authority; votes 1b, 5b, 15b, and 20b under the Department of Transport; vote 1b under Marine Atlantic Inc.; votes 1b and 5b for the Office of Infrastructure of Canada; and, vote 1b under the Windsor-Detroit Bridge Authority.

On behalf of the Department of Transport, we have before us Mr. André Lapointe, assistant deputy minister, corporate services and chief financial officer; Mr. Pierre-Marc Mongeau, assistant deputy minister, programs; and Ms. Lori MacDonald, assistant deputy minister, safety and security.

Welcome, all of you.

For the Canadian Air Transport Security Authority, we have Mr. Mike Saunders, president and chief executive officer, along with Ms. Andie Andreou, vice-president and chief financial officer.

Finally, on behalf of Marine Atlantic Inc., we have Mr. Paul Griffin, president and chief executive officer.

We welcome everyone to our committee today, and we thank you for coming.

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

Mr. Lapointe, we'll go over to you for five minutes.

[André Lapointe, Assistant Deputy Minister, Corporate Services and Chief Financial Officer, Department of Transport]

Thank you.

Madam Chair and members of the committee, thank you for inviting us here today to discuss Transport Canada's supplementary estimates (B) for 2017-18.

Transport Canada's focus for the coming year remains the safety and security of our transportation system. At the same time, we have an important role to play in advancing innovation in the transportation sector, ensuring we have the infrastructure and the services in place to facilitate the movement of people and goods. We also need to adapt to climate change, reduce air pollution and embrace new technologies to improve greenhouse gas emissions from the transportation sector.

Almost a year ago, Minister Garneau unveiled a vision for the future of transportation up to 2030. Transport Canada is working to implement that vision through programs and initiatives that are centred around five key themes: enhancing the experience of the Canadian traveller; building a safer, more secure transportation system that earns the confidence of Canadians; investing in a greener, more innovative transportation sector that embraces new technologies to improve Canadians' lives; protecting Canada's waterways, coasts, and the north; and, improving Canada's transportation infrastructure and trade corridors to get products to global markets more efficiently.

Through our supplementary estimates, Transport Canada is seeking a total of $72.5 million in funding to help support some of these goals. Of this amount, over half is for investments in transportation services, infrastructure, and the development of environmentally sustainable transportation.

We are requesting $47.5 million in new funding announced in budget 2017 for four key initiatives: the ferry service contribution program, which provides funding to support interprovincial ferry transportation in Atlantic Canada and eastern Quebec; implementing the trade and transportation corridor initiative, which will support investments in infrastructure and measures to support innovative transportation; adapting to the effects of climate change and reducing Canada's greenhouse gas emissions; and, the indigenous advisory and monitoring committee for energy infrastructure projects.

Our request also includes $24.3 million in existing funding that is being carried forward from the last fiscal year to 2017-18 to match the department's level of funding with its expected spending this year.

In addition, a number of transfers to other departments for various programs will reduce Transport Canada's spending by $900,000.

Finally, there is an item of $1.6 million for statutory employee benefit plan costs related to the projects I've mentioned, and an internal transfer of $200,000 to allow the listing of the grant for the northern transportation adaptation initiative.

To sum up, the funding I have outlined today will allow Transport Canada to continue delivering on its mandate, supporting government priorities, while also ensuring we are prudent and responsible in managing our resources.

Madam Chair, my colleagues and I are happy to answer any questions the committee might have.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Lapointe.

Mr. Griffin, I understand you have some opening remarks.

[Paul Griffin, President and Chief Executive Officer, Marine Atlantic Inc.]

Yes, I do.

Good afternoon, ladies and gentlemen and Madam Chair. I would like to thank you and members of the committee for your invitation to the meeting today.

As background for those of you who are unfamiliar with Marine Atlantic, we're a crown corporation that was created to fulfill Canada's constitutional mandate to provide a freight and passenger ferry service between Nova Scotia and Newfoundland. We report to Parliament through Transport Canada.

Our objective is to provide a safe, reliable, and efficient ferry service. We operate on two routes. Our primary route is between Port aux Basques and North Sydney, which is about a 200-kilometre route. We also operate a seasonal ferry service between Argentia, Newfoundland, and North Sydney. That covers approximately 500 kilometres.

In budget 2016, the Government of Canada announced $21.7 million for improvements to Marine Atlantic's terminal infrastructure in both North Sydney and Port aux Basques that would improve the safety, reliability, and efficiency of its operations. The infrastructure funding covers three projects.

The first is the replacement of a storm sewer system in the Port aux Basques terminal. This project was required to replace infrastructure that was at the end of its useful life and created periodic interruptions to our operations. The budget for this project totalled $5.3 million: $1.7 million in 2015-16 and $3.6 million in 2017-18. This project will be completed on time and on budget.

The second project involved the replacement of dock fenders in both North Sydney and Port aux Basques. Fender systems protect both vessels and dock infrastructure from damage caused by vessels when docking. The older fender system was inadequate and created unnecessary risks for the corporation. The budget for this project totalled $8.4 million, with expenditures of $2.4 million in 2016-17 and $6 million in 2017-18. This project will also be completed on time and on budget.

The third project, which is the subject of these supplementary estimates, will provide an automated mooring solution for the primary docks at both North Sydney and Port aux Basques. Our current mooring operations involve a significant amount of manual intervention, and this creates safety risks that can be mitigated with the new automated system. The initial budget for this project totalled $8 million: $2 million in 2016-17 and $6 million in 2017-18.

Automated mooring systems are highly specialized and engineered to meet the requirements of specific vessels and specific dock configurations. Upon initiating the project, we realized that we had underestimated the time required to engineer a solution and select the supplier. Because of these delays in selecting an appropriate system, we have been unable to spend any of the budgeted funds for this project in 2016-17.

As such, in supplementary estimates (B) for 2017-18, we're requesting re-profiling of $2 million for this project from 2016-17 to 2017-18. The remaining $269,000 requested to be re-profiled was regular operating capital not spent in 2016-17 that will help supplement the mooring budget in 2017-18. Our intention is to finish this project completely by the end of 2017-18.

Madam Chair, I would be happy to answer any questions related to our requests.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Griffin.

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

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

Thanks very much, Madam Chair, and thanks to all of the departmental officials and our folks from CATSA for joining us today.

Before I ask my questions, I congratulate you, Madam Chair, on being one of the parliamentarians of the year for providing mentorship to other colleagues.

[Some hon. members]

Hear, hear!

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

My questions are going to be directed to CATSA first.

It is my understanding that airlines are required to register and collect the air travellers security charge. However, under Bill C-49 we know that CATSA will be allowed to enter into a contract with airports, both designated and non-designated airports, in order to provide additional screening services on a cost recovery basis. How will airports pay for this additional cost? Can you comment on that?

[Mike Saunders, President and Chief Executive Officer, Canadian Air Transport Security Authority]

Yes. There are currently two airports paying for it through a cost recovery process. Both Toronto and Vancouver raise that through their airport improvement fees. They pay out of their own funds generated by the airport.

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

Thank you. In the 2016-17 fiscal year, the government collected $768 million from the air travellers security charge. Is that correct?

[Mike Saunders]

From our understanding, that would be correct, yes.

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

According to CATSA's 2017 annual report, government funding amounted to just over $673 million. Is that correct?

[Andie Andreou, Vice-President and Chief Financial Officer, Canadian Air Transport Security Authority]

Government funding for 2016-17 amounted to $617 million on the operating side and capital of $142 million, for a total of $759 million.

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

In the supplementary (B)s, the proposed authorities to date being requested by CATSA are $760,684,214. Do you have a way of forecasting or estimating what amount the government will collect from the air travellers security charge?

[Andie Andreou]

We don't have access to that information. That is collected by the finance department through CRA.

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

You don't have access to that?

[Andie Andreou]

We don't have access to that.

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

Okay. Can you tell me if the air travellers security charge is used to fund any other air security measures?

[Mike Saunders]

If I may, I think we should defer that to Transport Canada.

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

Okay. I will put that question to Transport Canada.

[André Lapointe]

Thank you.

Part of the air travellers security charge that is collected flows back to the department for certain activities, namely, those related to air security. The exact amount that flows back I don't have with me. I can get back to you on that.

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

I would appreciate that.

I look at what's in the supplementary estimates (B) today, and it is my understanding that, with the adjustment, this is still less than what was collected last year. Is that correct?

[André Lapointe]

Again, for the full collection, I don't have the numbers. This is done—reviewed—by the Department of Finance.

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

You can't answer that question for me?

[André Lapointe]

No. I'm afraid I cannot.