Transport Committee on Feb. 4th, 2021

[The Chair, Liberal, Vance Badawey]

I want to welcome everybody to meeting number 15 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021. The proceedings will be made available via the House of Commons website. As you are aware, the webcast will always show the person speaking, rather than the entirety of the committee.

To ensure an orderly meeting, I would like to outline a few rules to follow.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of the floor, English or French.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. I remind you that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute.

With regard to the speaking list, the committee clerk and I will do our best to maintain the order of speaking for all members, whether they be participating virtually or in person.

Pursuant to Standing Order 108(2), the committee is meeting today to continue its study on the impact of COVID-19 on the aviation sector.

I would like to welcome our witnesses from Air Canada: Dave Rheault, managing director, government affairs and community relations; and Jim Chung, chief medical officer. From Westjet Airlines, we have Andy Gibbons, director, government relations and regulatory affairs.

We'll start with Air Canada and Mr. Rheault and Mr. Chung.

You have the floor for five minutes.

[David Rheault, Managing Director, Government Affairs and Community Relations, Air Canada]

Thank you, Mr. Chair.

We are appearing before the committee today to talk about the devastating effect of COVID-19 on air travel.

I'm with Dr. Jim Chung, Air Canada's chief medical officer.

Before I begin, I would like to commend our employees—flight attendants, pilots, mechanics, airport staff, dispatchers and so on—and our partners and our suppliers, for their work during the pandemic, which has enabled us to continue our operations.

I would also like to reassure all those whose jobs have been affected by the pandemic that the entire Air Canada team is working tirelessly to protect our company and maintain it in a position from which it will be able to rebuild its network.

In 2019, we carried more than 50 million passengers across all inhabited continents. Our network connected the regions of Canada to each other and to more than 150 destinations around the world. Our three main hubs—Toronto, Vancouver and Montreal—were each ranked among the 50 most internationally connected cities. Apart from China and the United States, no other country, regardless of size, population or GDP, had three cities in this select ranking.

Prior to the pandemic, Air Canada directly employed close to 38,000 people in Canada, and another 6,000 at our regional partners. We also supported 190,000 jobs in spinoff industries and generated an estimated $50 billion in total economic output, or more than 2% of the country's GDP.

Air Canada and the aviation sector are truly economic enablers.

As an airline, we are in the business of safety. The safety of our passengers, crew and employees has, and continues to be, Air Canada's core priority.

This has guided us throughout this pandemic. Air Canada quickly implemented industry-leading measures or the CleanCare+ program to ensure the highest levels of safety—in many cases ahead of government regulation—including pre-flight passenger temperature checks, and passenger and employee face coverings.

As the Prime Minister said last Friday, carriers sat down with the government and, at the government's request, agreed to suspend their flights to sun destinations starting this week.

Despite these efforts, the impact of COVID-19 has been catastrophic for the whole travel and tourism sector.

Governments in Canada have imposed some of the strictest restrictions in the world, limiting intraprovincial, interprovincial, transborder and international travel. Demand for air travel has been devastated and airlines are losing massive amounts; in our case, we are burning around $15 million per day.

We had to act to mitigate our losses and preserve our liquidity. We took the difficult decision to suspend a number of routes networkwide, including regional routes. We also had to reduce our workforce by more than 20,000 employees. These decisions were not taken lightly, but, unfortunately, they were necessary.

This situation is unsustainable and could well cause major, irreparable and structural damage to Canada's transportation infrastructure. As several witnesses have mentioned, Canada must adopt an industry-specific program to help its carriers through the crisis and prepare a plan to ensure that travel can resume safely. The numbers that I have presented are telling. Our industry is an economic catalyst for the recovery of tourism and the aerospace industry as a whole. However, more is at stake, namely, the entire human aspect of air travel.

In a large country like Canada, air travel unites us. It allows us to see our families and loved ones, enables workers to be mobile and opens our country up to the world. Aviation facilitates trade and exports, which thousands of Canadian businesses depend on, and it fosters immigration, which is essential to our country's growth.

Governments in other countries have taken action by providing the equivalent of over $200 billion (Can) to their carriers, many of which are in direct competition with Canadian companies.

There are discussions ongoing between carriers and the government that are confidential, covered by NDAs, and on which our ability to comment is, of course, very limited.

[The Chair, Liberal, Vance Badawey]

You have one minute left, Mr. Rheault.

[David Rheault]

Thanks.

In addition to sectorial support, other measures are needed to restart our industry. Air Canada is a strong proponent of a science-based, data-driven reopening of our borders. It can be done safely.

The McMaster HealthLabs study, which we sponsored at Pearson, has clearly demonstrated that a reduced quarantine requirement, in line with CDC guidelines, would protect against the spread of COVID-19 while allowing for a measured restart of the industry. Testing allows public health authorities to effectively identify and isolate incoming cases, reduces community transmission and allows safe travel.

The Prime Minister said last week that the government is committed to working with the major airlines on the future relationship between testing and quarantine requirements. We're hopeful that this committee will make a recommendation to that effect.

Before the pandemic, Canada had a competitive industry that was gaining market share and creating thousands of jobs at home. It must be protected.

Thank you.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Rheault. That was very well done.

We're now going to move on to WestJet.

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

[Andy Gibbons, Director, Government Relations and Regulatory Affairs, WestJet Airlines Ltd.]

Good afternoon, Mr. Chair. Thank you very much for the opportunity to be with you this afternoon and contribute to your important study.

We at WestJet have heard from many communities and businesses that rely on our investments to connect them and their economies to the world. Our approach to this crisis overall has been multi-faceted but rooted in our commitment to serve Canadians and conduct ourselves in a transparent manner with all levels of government.

Before we get into details, it is important to thank our employees who have suffered so much but continue to serve Canadians and persevere. Everyone in our company is fighting for you.

COVID had had a devastating impact on WestJet and our employees, with bookings dropping as much as 95%. A staggering 97% of guests who had booked pre-COVID to fly between July and November ended up cancelling. At our current booking levels, we would need six and a half years to achieve our 2019 bookings, but this story is not just about bookings and revenue.

We now only have 5,600 active WestJetters remaining from our pre-pandemic workforce of over 14,000. One thousand of these employees are on leave and another 4,000 have, sadly, exited permanently a company and a career they loved. WestJetters have been living in uncertainty, enduring a roller coaster of layoff, recall, layoff, with the fluidity and unpredictability of the travel restrictions we have seen.

WestJet has had to make tough decisions. By slashing our costs by 60%, we have been able to implement our progressive refund policies and maintain regional air services to the greatest extent possible.

Safety remains our top priority. We have implemented stringent health and hygiene policies that ensure the safety of our staff and our guests. We work very collaboratively with our public health partners. Since the pandemic began, we've operated more than 30,000 flights and carried more than 1.3 million guests. As former Minister of Transport Marc Garneau noted, there have been no known transmissions of COVID on board an aircraft. In September, we implemented a zero-tolerance mask policy. This is just a broad highlight of some of the measures.

WestJet thanks the Prime Minister for recognizing the measures we have taken to keep Canadians safe, and on Friday, for calling us a strong partner in curbing the spread of COVID-19.

Contact tracing is also an important step of stemming COVID-19. This is why WestJet has taken extra steps throughout the pandemic in advising our public, our guests and our employees who have been affected by COVID-19. It is our understanding that we are the only airline group to post affected flights on our external channels and email any impacted guests.

We're a proud partner with Vancouver International Airport, which you have heard from, and the University of British Columbia and Providence Health Care on a research pilot that is testing the use of rapid testing for departure in an airport environment. We are also grateful to the Government of Canada and the Government of Alberta for the arrivals-testing pilot project that safely reduces quarantine times for arrivals. We believe that study and pilot project is an essential piece of work that should remain intact.

On refunds, a subject of great discussion at this committee, we remain the only Canadian airline that proactively refunds guests whose flights were cancelled by us due to the pandemic, whether the fares purchased were refundable or non-refundable. We announced this important step in October and have been recognized by consumer groups and others for this progressive and proactive step. Our decision aligns us with the consumer-friendly policies in the United States, the United Kingdom and the European Union.

[The Chair, Liberal, Vance Badawey]

Mr. Gibbons, you have one minute left.

[Andy Gibbons]

Thank you.

Last week this committee heard from our union partners, who are united in their advocacy of measures to allow Canadians to safely resume travel. We are not seeking a policy that strictly supports our bottom line. We are seeking a framework that will lower the cost of travel for Canadian families, introduce green credits for fuel efficient aircraft and ensure that Canada has a competitive global airline based in western Canada.

There are two main priorities we recommend that this committee include in your final report. The first is that, given global uncertainty, Canada must prioritize domestic travel and negotiate a transparent and clear policy with provincial governments. This could be based on COVID levels or a percentage of the population vaccinated. We believe this should be a priority item for the Minister of Intergovernmental Affairs and the Minister of Tourism. Canadians should be able to see their country this summer safely.

Second, we recommend that you transition the Alberta pilot project into national policy and include funding for this in the upcoming federal budget. The relationship between testing and quarantine requirements must evolve, and we note the Prime Minister's commitment to work on this.

In closing, I have a few brief comments about the proposed Air Canada-Air Transat merger, as it has been a subject of interest for members. Like the Competition Bureau and other consumer groups, WestJet has grave concerns about this. Air Canada and Air Transat are number one and two for the trans-Atlantic market—

[Chris Bittle, Liberal, St. Catharines, ON]

Pardon me, Mr. Chair, I have a point of order.

[The Chair, Liberal, Vance Badawey]

Thank you. Go ahead, Mr. Bittle.

[Chris Bittle, Liberal, St. Catharines, ON]

I don't know if I'm the only one, but I'm getting the French translation over the English channel.

[The Chair, Liberal, Vance Badawey]

Is that the case for everybody else as well?

Mr. Clerk, can we have that addressed, please?

[The Clerk of the Committee, Mr. Michael MacPherson]

It should be okay now.

[The Chair, Liberal, Vance Badawey]

Okay.

Mr. Gibbons, please go ahead.

[Andy Gibbons]

Thank you.

Like the Competition Bureau and other groups, we have grave concerns. Air Canada and Air Transat are number one and two on the trans-Atlantic market.

For that critical part of our global market, this would effectively be a merger between Bell and Rogers. Air Canada would hold a combined 94% share of Canadian carrier capacity to Europe and a 70% market share on key routes from Toronto to London, Paris and Rome. Should the government decide to allow this merger, we also believe that critical remedies should be imposed, including on Aeroplan, slot spaces at international airports and the use of Terminal 3 at Toronto Pearson.

Thank you so much for your time today. WestJet will continue to be a collaborative partner with all of you as we work towards a safe and responsible recovery.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Gibbons. Great job.

Now we're going to move to our first round of speakers.

Starting us off, for six minutes, we have Ms. Kusie from the Conservatives, followed by Ms. Jaczek from the Liberals, Mr. Barsalou-Duval from the Bloc and Mr. Bachrach from the NDP.

Ms. Kusie, you have the floor for six minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

Mr. Gibbons, it's very nice to see you. I want to applaud WestJet's zero-tolerance policy on those not wearing masks, which I saw implemented in front of me on my most recent trip home from Ottawa. It is enforced. I saw someone marched off the plane as the rest of the plane applauded.

I want to talk to you first about one of your last points, the YYC pilot project. As you know, as the official opposition, we have been calling repeatedly not only for a plan but a plan with rapid testing on arrival and departure as a cornerstone of this plan, yet we have not see this government implement it. They've come down with a sledgehammer as a result of their incapacity and inability to implement these other tools earlier within the pandemic, and of course now we're seeing this with the horrific vaccine rollout.

Could you please comment, first of all, on why you think this pilot project wasn't implemented, and second, on what it has been like to implement these travel restrictions with very little notice? First there was the 72-hour PCR test requirement on December 31, which was only implemented seven days later, and now there are these incredible travel restrictions that Canadians and, most importantly, the airline sector are suffering through in a rush to implement.

[Andy Gibbons]

Thanks very much, Ms. Kusie. It's great to see you as well.

Thanks for flying with us. I'm sorry you had to witness enforcement.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

It was awesome.

[Andy Gibbons]

Our staff take it very seriously and take the safety of everyone very seriously. I actually am glad that you witnessed that.

I'll start with the Alberta pilot project, because it's front and centre and really critical. Notwithstanding the Prime Minister's announcements on Friday, we do think that this pilot project should remain intact. The reason we feel this way is because of his words on Friday. What he committed to was to look at the relationship between quarantine and testing.

Eventually, our country is going to have to safely restart, and we do have to find ways to do this safely. If we have a made-in-Canada study with that data and research and with experience from air carriers, airports and our guests, etc., let's not throw that away. Let's keep that intact. As long as it has the confidence of the public health officials in Alberta and the continued confidence of the Public Health Agency, we think it should remain intact, because it gives us the best footprint and standing in order to move forward.

I'm just looking at my iPhone because I took a screenshot of Dr. Hinshaw's comments yesterday. She was asked about the pilot project as it relates to the spread of variants. I think it's a really important tweet and message that she put out, and I would encourage members to take a look.

She said, “We have detected cases thanks to our lab & border pilot program, which has detected 28 variant cases. Under the pilot, we have tested almost 45K travellers on arrival. This has been a vital tool to stop the virus from spreading quickly within our communities.” She went on to say, “Without this pilot program, our variant case numbers would be lower—but the variants would likely be spreading more widely in our province without us knowing about it. We are working hard to break the chain of transmission but are not out of the woods”.

The Alberta pilot project, Mrs. Kusie, allows for two tests, and it allows public health officials to capture quickly what the variants are or are not. You will note that they've also adjusted the pilot project and that it has shifted from quarantine release on first test to a second test at seven days. Hopefully, I have addressed how critical that is from a public health perspective, completely parking the economic side of that type of pilot project.

I was going to touch on the PCR measure before Christmas. Look, we put out a very tough communication after that announcement, and we did call the policies “incoherent and inconsistent”. That's not typical of our company to speak like that. The reason we felt that way, Mrs. Kusie, is that we did find out about that testing program in the media. We're so committed to public health and we're so committed to doing the right thing that it was very frustrating to not have our recommendations around testing put in place and then to be advised by the media that this was taking place.

The good news is that we did our very best. Our company rallied. We did our best to find tests for our guests and to get them home safely. I think the reaction to that announcement is better illustrated in our commitment to do the right thing for our guests and work collaboratively with the government than it is in our tough public response.

I hope that has touched on some of your questions.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you.

I want to turn quickly to a topic that the Prime Minister keeps bringing up repetitively in question period. He seems to pass off the CEWS program, which I know WestJet took advantage of, as acceptable for some type of sector supports for the airline sector. In fact, it was really a second-rate EI program and, more importantly, left Canada as one of the only nations in the world, much less in the G7 and G20, without any sector-specific support.

Can you comment on CEWS and what else you would have expected from this government in forms of support?

[Andy Gibbons]

In terms of support, I think the best guidance I could give you is the open letter that our president and CEO, Ed Sims, sent to members on December 10. That really is the best reference point for how we feel about those issues. As Mr. Rheault noted in his comments, we are under an NDA with respect to the actual negotiations and the substance of those, but I would refer you to that letter, because it does speak to how we see that issue.

With respect to the wage subsidy, we appreciate that. We have been thankful for the government. It has meant a lot to our people to stay connected to WestJet. You know how passionate our employers are for the work they do, so the ability to tie them to the company, which is the purpose of the program, has been valuable. We requested that the program be extended earlier in 2020, and the government agreed, and they did that, so kudos on CEWS.

Any comment that we make about additional support is not to minimize the value of that program, because it has been valuable, but you are correct. CEWS, no matter how you slice it, is not a robust industry recovery plan or an assistance package at all consistent with what other G7 nations and other countries have done.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Gibbons and thank you, Ms. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

[The Chair, Liberal, Vance Badawey]

We're now going to move on to Ms. Jaczek.

Ms. Jaczek, you have the floor for six minutes.