Transport Committee on Feb. 2nd, 2021

[Bruce Rodgers]

Just to clarify, 50% of the cargo moves in the belly holds of passenger aircraft. Once the passenger aircraft went down by significant degrees, people reverted to charter aircraft. Freight is still moving. Cargo is still moving. They're moving in charter aircraft right now, at significantly higher prices, as I mentioned. That will continue for emergency parts.

We've seen a significant portion of the commerce go off air and into oceans, moving over to the marine sector versus aviation. That is a significant change that has occurred over this period of time, but emergency parts, products and services will continue to fly in the air through the charter aircraft if belly capacity is unavailable.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Rodgers and Mr. Soroka.

We now move on to Mr. Rogers.

Mr. Rogers, you have the floor for five minutes.

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

Thank you, Chair.

Thank you to all of the witnesses who are with us today and for all of the information you've provided about the challenges you're facing.

My first question is for Nav Canada. Gander, being in the centre of the international flights, of course, for eastern Canada, was the crown jewel of Nav Canada on 9/11 when all the aircraft landed at Gander. The town and the people are wondering about the long-term plans for the Gander operations, given that there have been some references to proposed layoffs because of financial challenges.

People are concerned about jobs, of course, and whether or not, after the pandemic is done—hopefully in the not-too-distant future—these people, with the experience they have, will be recalled and brought back to the air navigation centre in Gander.

[Ray Bohn]

We certainly understand the importance of good jobs in small communities like Gander and the role that Nav Canada plays in the local economy. I want to highlight that the changes to our workforce in Gander were made only after careful consideration of the operational requirements, both currently and, more importantly, in the future.

We continue to assess our requirements as we move forward, both positively and negatively. Certainly, if traffic rebounds at a greater rate than we're anticipating, we will be most interested in continuing employment with our employees at Gander. I think it's fair to say that they've made a significant contribution to the organization.

We're hoping that things will improve beyond our estimates, but to date, all of our work has been done based on where we expect traffic to go in the future.

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

Thank you so much.

For Mr. Deluce and Mr. Roberts, I'm talking about restoring regional routes. I have just a couple of quick questions around that.

From your perspectives, what will it take to restore lost connectivity after the pandemic? After the pandemic subsides, how feasible do you think it will be to restore all of the regional routes we lost? What kinds of timelines do you envision for that to happen?

[The Chair, Liberal, Vance Badawey]

We'll start off with Mr. Deluce and then go to Mr. Roberts.

[Robert Deluce]

Well, I think we've always viewed the regional routes in the smaller communities as the ones that really are the most vulnerable in a situation like this, because of the thinner traffic, and we also believe that the communities need and deserve the airlines. The airlines deserve and need a level of support that would allow them to ensure that there's some resumption of service, as quickly as possible, to those regional destinations. That's certainly our position.

That's why I think the move to look more specifically at an industry-specific support mechanism is so important. I think the fact is that it looks like it's now playing out in some form, and I think that, working together, there is every opportunity for communities, airports, airlines and government to focus in on how best to resume service in some of the smaller regional communities that so much require that service.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Deluce.

Mr. Roberts, do you want to comment?

[Julian Roberts]

Yes.

We have a good opportunity to rebuild the regional markets pretty quickly. The way we've done it is that we've really diversified our business by not just offering passenger service but adding cargo into our aircraft. We have other types of services. We do contracts with hospitals and with mining companies. We support fly-in and fly-out, so markets in Quebec and eastern Canada.

Last summer, we were in the middle of a pandemic. There was the Atlantic bubble. There was a bit of a bubble here in Quebec. We saw an enormous increase in local tourism. I think if we had some initiatives that we could put behind local tourism to push people out to the regions.... We always put a lot of dependency on the regions. Well, the regions are small; they're this and they're that. You know, I'm from a small region with a population of 300. We need to centre a little bit more on the bigger populations, bringing them to see our Canadian beauties: Stephenville, Deer Lake, Sydney, Charlottetown, Gaspé, Les Îles de la Madeleine—these places are phenomenal—Sept-Îles, Port-Cartier. If we could develop some tourism incentives to bring people from the bigger city centres to the regions and turn the problem around a bit.... The traffic is just one way, and we're putting it all on the people in the regions. Let's use some of the population push that we have.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Roberts.

Thank you, Mr. Rogers.

We're now going to move on to Mr. Kram for five minutes.

Mr. Kram, you have the floor.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you, Mr. Chair.

My questions are for the witnesses from Nav Canada, and they're concerning the closure of air traffic control towers.

Last Thursday, Doug Best testified at the committee. He's the president and CEO of the Canadian Air Traffic Control Association. He said, “Nav Canada management received bonuses in December worth approximately $7 million and unionized members got layoff notices.”

Could the witnesses from Nav Canada explain? If the federal government gave Nav Canada a $7-million grant tomorrow, how many air traffic control towers on your closure list could have been kept open?

[The Chair, Liberal, Vance Badawey]

Mr. Bohn, go ahead.

[Ray Bohn]

I just want to highlight again that management employees, I think, were the hardest hit in terms of our workforce adjustment and definitely in terms of their compensation, both from a salary perspective and, as I mentioned earlier, a pension perspective.

In terms of how many facilities we would keep open based on any government grant, we would have to evaluate that. Again, we're looking at transforming an industry. Therefore, we are having to transform the services that we offer, based not on what we see today but on what we anticipate we're going to see well into the future. That's how our decisions will be made.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. When I talk with the representatives from the Regina Airport Authority, the last thing on their minds is Nav Canada bonuses. What's at the top of their minds is public safety, future growth after the pandemic is over, and keeping the lights on in the meantime.

How does Nav Canada plan to ramp up to pre-pandemic levels if seven of its air traffic control towers have been closed down?

[Ray Bohn]

The decisions that we're making with respect to air traffic control towers are based on air traffic that we saw prior to the pandemic and that we anticipate we will see post-pandemic. Those changes are not being made based on where we're at today in terms of air traffic levels, so we will continue to provide the appropriate level of service, always keeping safety at the forefront and in mind for all the decisions that we make.

[Michael Kram, Conservative, Regina—Wascana, SK]

Before the pandemic, in 2019, were air traffic controllers regularly required to work overtime?

[Ray Bohn]

Yes, air traffic controllers would have worked overtime, or many of them would have worked overtime. Overtime is used as a way to balance supply and demand with respect to our services, given that we're a 24-7 operation. We have used overtime to deal with staff shortages in some locations. However, even in locations where we're fully staffed, we will use overtime to balance that supply and demand.

[Michael Kram, Conservative, Regina—Wascana, SK]

If Nav Canada was having its controllers work overtime before the pandemic, are these levels of overtime sustainable post-pandemic, or is Nav Canada just expecting dramatically reduced levels of air travel for the foreseeable future?

[Ray Bohn]

We are certainly expecting significant reductions in air travel in the foreseeable future. However, all our plans...including looking at what would be the optimal mix of overtime and regular pay is factored into how we determine our staffing levels going forward, to ensure that we have an extremely safe operation, as we have delivered historically to the Canadian public and our customers.

None of that will change, but the environment has changed. We have to respond to that environment and ensure that we're providing the appropriate level of service based on where we expect demand to be.

[Michael Kram, Conservative, Regina—Wascana, SK]

I believe you said in your opening statement that it would take six to seven years to return to pre-pandemic levels.

What modelling did you use to come to that conclusion?

[Ray Bohn]

I believe it was Ms. Marshall who made that comment about six to seven years.

I will say that our current forecast—although we're reviewing it in light of recent government announcements—is that we would not see traffic return to 2019 levels until 2023-24. However, that is likely to be pushed out, similar to what Ms. Marshal said earlier.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Bohn. Thank you, Mr. Kram.

We're now going to move on to Mr. El-Khoury.

Mr. El-Khoury, you have the floor for five minutes.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Thank you, Mr. Chair.

I welcome our witnesses.

My first question is for Mr. Deluce.

Mr. Deluce, we have heard that travel agencies lost their commissions after flights were cancelled. Those are often small businesses that cannot survive without those commissions.

What are your thoughts on their situation?

[Robert Deluce]

I appreciate the question.

Certainly it's something that is under discussion and consideration. I think the normal practice being that when refunds are given, agencies in fact relinquish their associated commissions, it's also very much recognized that those agencies have probably had to do a lot of extra work during these last number of months, most of which was not compensated for. That was all in an effort to handle and deal with innumerable changes and alterations to the ever-changing environment that airlines and airports and passengers have found themselves in.

It's one of those things where everyone is suffering. That includes airports and Nav Canada. It includes airlines. It certainly includes travel agencies, hotels and others.

Our own view is that I think some consideration needs to be given to the agencies that have worked so diligently to keep things moving and adjusted while passengers were subjected to numerous alterations to their flight schedules.

I can't speak for them or make any decisions there, but I certainly feel for them and appreciate the predicament they're in.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

I am still addressing myself to Mr. Deluce.

We know that the federal government announced financial assistance by imposing conditions related to a number of issues. The first condition is refunding clients whose flights were cancelled. The second condition concerns the protection of regional routes and connectivity. The third condition aims to honour contracts with Canadian aerospace companies. The last condition has to do with the collection of travel agencies' commissions, which has also become an issue.

Could you tell us what issues are the most problematic for airlines and provide some details please?