Transport Committee on Dec. 8th, 2020

[The Chair, Liberal, Vance Badawey]

Yes, Mr. Lawford, go ahead.

[John Lawford]

Thank you.

I would just add that, were a court or the CTA, via a sweeping decision, to come to that conclusion, our constituents would not be happy, and we would be supporting a bill like Bill C-249 to change the law. Thank you.

[The Chair, Liberal, Vance Badawey]

Thank you.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

I want to go to another question here, probably for Mr. Sparling.

I understand that when Transport Canada approved the merger of Canadian North and First Air they imposed a lot of very strict conditions to protect against the potentially predatory effects of a monopoly.

Would you agree to those same conditions today?

[Joseph Sparling]

I think things have changed pretty significantly since the time of the merger. It's not really for me to comment on how Canadian North and First Air feel about it. I don't know what the conditions were, really, but I would expect that a lot of them would not be very appropriate in today's environment. If there were conditions relating to reduction in service, for example, when demand dries up, if you don't reduce service in some way, in some manner, you're just flying a lot of empty seats around. It makes no sense.

The communities themselves must have some minimum level of service. Many of their communities don't have road access, so there is a minimum level of service that needs to be maintained. I expect that they'll figure out what that is, based upon consultations with the community. We certainly did that in our market. The first thing we did when the pandemic hit was to reduce our service from 30 flights a week to five flights a week. The first people we heard from was the hospital and the Yukon government's emergency measures organization. They said that to keep the emergency supplies flowing, we needed to have more flights. We've worked out a schedule with them and added back some flights right away to make sure there is enough service to look after the essential supplies and transportation, even if it is less than the actual level of demand.

To answer your question more succinctly, I would suggest that a lot of the conditions may well be inappropriate in a pandemic environment.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Sparling.

Thank you, Mr. Rogers.

We're now going to move to Mr. Barsalou-Duval for two and a half minutes.

The floor is yours.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

My first question is for Dr. Lukács.

During his appearance before the Standing Committee on Transport, Mr. Streiner, the chair and CEO of the Canadian Transportation Agency, said that the agency doesn't have the power to require airlines to refund the cost of airline tickets.

Is that true?

[Dr. Gábor Lukács]

Mr. Streiner displayed stunning ignorance about the mandate of his own organization in what he stated in his testimony.

While the APPR is fully drafted, it is not a complete code. In the past 16 years, the agency had no [Inaudible--Editor] to enforce passengers' fundamental right to a refund. He did so—and his organization did, to be more precise—based on the Canada Transportation Act and the air transportation regulations, not the APPR. The Canada Transportation Act and the air transportation regulations remain in effect; they have not been amended. The law has been and remains that passengers still have a fundamental right to a refund regardless of the reason for the cancellation of a flight.

[The Chair, Liberal, Vance Badawey]

Mr. Barsalou-Duval.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you for your answer, Dr. Lukács.

I proposed a motion before this committee to obtain the correspondence between the office of the Minister of Transport and the Canadian Transportation Agency about reimbursing airfare costs. The goal is to determine whether the Canadian Transportation Agency has in fact made impartial decisions, without any political pressure.

Would you say that adopting such a motion would be a good way to ensure the impartiality of the Canadian Transportation Agency?

[Dr. Gábor Lukács]

Mr. Chair, Canadians are entitled to transparency in how a government body deals with their finances, with decisions that affect their money. The motion tabled by Mr. Barsalou-Duval helps transparency and helps passengers get an explanation as to how the Canadian Transportation Agency came to issue a misleading statement on vouchers.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Dr. Lukács.

Minister Garneau—

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Barsalou-Duval. Your time is up.

Thank you, Mr. Lukács.

Mr. Bachrach, the floor is yours for two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

My first question is for Mr. Jack.

Mr. Jack, you spoke a bit about how different jurisdictions around the world have been handling this issue of refunds and noted that other countries have actually done a lot better in getting money back into the pockets of the air passengers who bought tickets and had their flights cancelled. My question is why we've seen such a different circumstance in other jurisdictions compared with Canada. Is it a matter of those jurisdictions having different or stronger legislation to protect their consumers, or is it a matter of political will? That is, have other governments done a better job of getting those refunds for their citizens?

[Ian Jack]

I think it's a bit of both. It depends on the jurisdiction. The U.S. law is clearer. Leaving aside what the Canadian law actually says, there's no doubt the American law, on this point, is crystal clear in terms of some refunds, at least, that were processed.

In the European Union many governments got off the mark a lot faster in negotiating with their primary carriers. In the German example, for instance, the government made a deal with Lufthansa many months ago. They said the same thing that our Canadian government is saying now, which is, “As a result of our help for you, Lufthansa, to continue flying in the future, you must make your customers whole.” The thing is, they got on with that months ago.

It is a very good question why it has taken our government until November to make the same kind of statement. There are other jurisdictions that got onto this months ago.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair. Maybe I'll stay with Mr. Jack.

It seems as though we've heard a change in tone from the minister. When the minister first appeared, he was quite dismissive of these calls for refunds and pointed to the financial difficulties that carriers were experiencing. More recently he's had some stronger language around the fact that he's not going to be putting together a sectoral support package until the carriers produce the refunds.

Why do you think there's been the change of tone? What has happened along the way that has caused that change in tone?

[Ian Jack]

I don't think we can speak to the minister's motivation on this. I would say it's understandable that there was a lot of panic everywhere in the world—including, probably, in the corridors of Transport Canada—for the first few weeks of this pandemic. Nobody knew what was going on, but we've had lots of time since to calm down and get on with this. It is really too bad that it's taken until now, December. We still don't have....

They've announced they're going to do a deal. They don't have a deal yet. We don't know when that will happen, of course. Before we start seeing any refund cheques issued, we will quite likely—quite possibly, at least—reach the one-year anniversary of the first people having had their money disappear into an airline's coffers and not getting it back after a cancellation. Of course, there's not even any certainty of that at this point. The situation has, just simply, dragged on for too long.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Jack, and Mr. Bachrach.

We're now going to the Conservative Party.

Mr. Soroka, for five minutes, the floor is yours.

[Gerald Soroka, Conservative, Yellowhead, AB]

Thank you, Mr. Chair.

My first question is for Mr. Lawford. I like the idea of your creating a fund for passengers to get money from if there's an event that happens again. One of the big concerns that I keep hearing from the public is that airline tickets are expensive enough. How much money are you thinking of when you say a “small” amount?

[John Lawford]

That's a good question. I don't have a study for you. I can say that in similar situations, telecommunications monthly bills, for example, have to go up by 50¢ to cover subsidies for, say, rural telephone service. It's probably along that kind of line. You'd get a 50¢ or $1 charge, something like that, per airline ticket. I don't know. I have to admit I haven't done the numbers.

Either way, it's going to come out of airlines, which will then pass it on, I'm sure, to consumers, whether it's a new rule, like from Bill C-249, or whether it's a fund.

[Gerald Soroka, Conservative, Yellowhead, AB]

Okay, so this is just in the conceptual stage. You don't really have any numbers or anything in that regard.

Mr. Jack, you mentioned, right at the end of your comments, reforming security to make it easier for passengers to go through security. What were you talking about there?

[Ian Jack]

Thank you for the question, Mr. Soroka.

We think that at some point we are going to get past this pandemic. We will start to see air travel resume, perhaps not for some time now to the volumes it was at before. There were a series of reforms that were finally getting under way in this country, to a system that hasn't really been touched in over 20 years—the airline system broadly. All of those, of course, went into the deep freeze when COVID-19 happened.

We hope that some of them will be brought back and that they're not all forgotten. One of those, in relation to CATSA, involved the length of the lineups that used to exist. This is obviously not an issue today because nobody's flying, but when people start flying again, we're going to start seeing very long lines again. There was a project by the government to reform CATSA significantly, to give it better funding, and to allow it to invest more in technology so that we could see a better air system for Canadians.

The point of my remarks at the very end was simply to say, let's deal with this big issue of refunds first, but let's not forget about all of the other things that we all cared about right before the COVID pandemic hit. We should come back to some of those once we get past this unfortunate situation.

[Gerald Soroka, Conservative, Yellowhead, AB]

That's why I wanted to ask the question, because I wasn't certain how it tied in, but now it doesn't quite tie in as well as I thought it would.

To Mr. Lukács, then, what you're implying here is almost that airlines were potentially selling tickets knowing that they weren't going to have the planes flying at the time. Is this true? Do you have any numbers to back this up, and if so, how much money do you think they collected in that regard?

[Dr. Gábor Lukács]

The numbers that we do have, as I mentioned, relate to the flights for November. Airlines, and frankly, Air Canada, were selling tickets between September 25 to October 31. Approximately 75% of the flights of Air Canada scheduled for November were cancelled. We are seeing somewhat similar trends for WestJet, but we don't have numbers for it. Those numbers that I'm referring to were also reported quite broadly by the Canadian press.

[Gerald Soroka, Conservative, Yellowhead, AB]

Basically they were using this money to help fund their operations at the expense of customers.