Transport Committee on Feb. 4th, 2021

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Chair.

First of all, I'd like to say to the witnesses that every member of this committee is very aware of the devastating economic impact that COVID-19 has had on your industry. Lest we forget, it has also had a devastating effect on the health of Canadians. We have some 20,000 Canadians dead of what, in theory, is a preventable disease.

I'd like to ask Dr. Chung my first question.

Dr. Chung, about a year ago you would have been, as chief medical officer for Air Canada, very aware of the fact that there was a novel coronavirus out there. A year ago, we already knew that the first case here in the GTA was a Canadian returning on a plane from Wuhan.

Please tell us what went through your mind. What was your thinking? You must, obviously, have a pandemic preparedness plan at Air Canada.

What actions did you take? What advice did you give to senior management at Air Canada in the early days of this pandemic?

[The Chair, Liberal, Vance Badawey]

Dr. Chung.

[Dr. Jim Chung, Chief Medical Officer, Air Canada]

Thank you, Chair, for the question.

I do fully agree that this has been a significant challenge for everyone—all Canadians. I don't think anyone is to blame, per se, for the pandemic. It really just happened.

We were fortunate in that we had already developed a partnership with a company called BlueDot, which is a health AI company that helped give us almost an early warning of this pandemic. I'd be dishonest if I said I didn't realize early on in January how much of a significant pandemic this would be.

Having said that, Mr. Chair, as they mentioned, we did have a pandemic playbook that we had reviewed early on in January. As most of you may know, we did review our own internal processes, our pandemic response and subsequently did make the decision to stop our flights to China. I believe it was January 26.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

In terms of personal protective equipment for cabin crew, were you ordering supplies? How were you preparing?

[Dr. Jim Chung]

We were reviewing our pandemic checklist. Part of that pandemic checklist is a review of what supplies are required and what inventory we had at that time.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

In terms of the progression after the announcement that this was a pandemic and your suspension of flights, particularly from China, what further recommendations did you make to Air Canada in your role as chief medical officer?

I think we all know that there's a first wave and a second wave in pandemics. How were you preparing looking forward? What recommendations were you making?

[Dr. Jim Chung]

It's not a single individual in any large organization like ours. It takes an entire team. It was the entire team, including our vice-president of corporate safety and our corporate safety team as well, who got together to discuss these issues and to review what was the best evidence out there.

Initially, early on, as everyone is aware, there was very limited data and information back in January and February about what the transmission risk was and what were truly.... Initially there was some confusion about whether masks were recommended or not recommended here. There were a lot of challenges initially in that early time frame.

We did constantly consult with our public health colleagues, both on the federal and provincial level, as well as colleagues and resource consultants such as BlueDot and other infectious disease specialists to help guide us with respect to what the best practices were at the time.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

I believe, Dr. Chung, that you were advocating for testing prior to boarding airplanes. You were interviewed by Lorraine Simpson in the fall. You were making recommendations at that point.

Did you discuss this with the Public Health Agency of Canada or any other public health officials?

[Dr. Jim Chung]

Air Canada has always been a strong advocate of testing. I feel that we've been a world leader, quite frankly, in this area in advocating testing as a means of mitigating the pandemic and the risk of importation of infected COVID passengers. Similar to my colleague, Mr. Gibbons, we do firmly believe that there is a role for testing as a mitigation and an exit strategy from the 14-day quarantine to reduce the risk, yet keep the safety of Canadians in mind.

We did launch the McMaster HealthLabs GTAA study on September 3, which ran for two months. We did collect 46,000 tests from 12,000 participants. That provided the data that we did communicate and discuss; we did share those details and data with public health agencies, both federally and provincially.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

I was actually referring specifically to pre-boarding testing, which apparently you were advocating last fall, so you couldn't have really been surprised when our government did introduce that in early January.

[Dr. Jim Chung]

That interview with Lorraine Simpson was directly in response to the McMaster HealthLabs study, the arrival testing, but certainly there is a potential role for pre-departure testing as well. There are pros and cons to that for sure, Mr. Chair.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Chung.

Thank you, Ms. Jaczek.

We're now going to move to our next line of questioning from the Bloc for six minutes. We have Mr. Barsalou-Duval.

Mr. Barsalou-Duval, the floor is yours.

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

Thank you, Mr. Chair.

Air Canada refuses to refund travellers for trips cancelled due to COVID-19, yet, according to the third quarter report that you released on November 9, 2020, Air Canada had $8.7 billion in liquidity. So, you can afford to refund travellers.

WestJet did it. Why haven't you?

[David Rheault]

Thank you for your question.

First, I'd like to say that Air Canada has spent more than $1.2 billion to refund travellers for their tickets since the start of the pandemic.

All travellers who had refundable tickets have been reimbursed according to the terms and conditions of the tariffs submitted by Air Canada to the Canadian Transportation Agency.

As for your question on full refunds, we have, from the outset, been complying with the order and statement of the Canadian Transportation Agency specifying that, when there are reasons beyond the carriers' control, travel credit vouchers were an acceptable solution as long as their timeline and terms and conditions were flexible. Air Canada has improved its voucher policy.

As for your question about refunding all travellers, as we have publicly stated on a number of occasions, if assistance is provided to air carriers and if that assistance is reasonable and proportional to the losses the carriers are incurring, we are fully prepared to issue refunds.

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

Thank you.

In 2016, you illegally laid off 1,800 Aveos employees. You then threatened to halt the purchase of 45 Airbus A220s, which are made in Mirabel, and to hold back plans to create a centre of excellence if the federal government did not change the law to accommodate you. Five years later, that centre of excellence still does not exist, and you cancelled 12 of the 45 aircraft that should have been ordered.

Now, Air Canada has received more than $500 million in wage subsidies. The International Association of Machinists and Aerospace Workers, or IAMAW, has informed us that you are having your aircraft maintained in the United States and having the Boeing 737s converted in Great Britain, while unemployed Quebeckers could be doing that work.

Do you think that Air Canada should keep its promises and stop consistently ignoring Quebec workers in order to prove that it is a good corporate citizen before taking advantage of taxpayers' money?

[David Rheault]

There are many parts to your question. It sounds more like a statement than a question.

It also contains falsehoods, Mr. Barsalou-Duval.

Air Canada has always supported the aerospace industries of Quebec and Canada. We have bought many Q400, CRJ and CSeries aircraft. Air Canada's order was critical to the survival of the program, as Mr. Bellemare has said. It put the program back on its feet.

As for the centre of excellence in Quebec, that was an agreement that we made with the Quebec government, and we will honour it. We have always said that these aircraft would be maintained in Quebec. I will also add that we have transferred our maintenance operations to Quebec. All of Air Canada's single-aisle planes are now maintained in Trois-Rivières, ensuring nearly 350 well-paying jobs.

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

As for the sale of Air Transat, in addition to the duplication of head office and regular office jobs, we also know that the routes used by Air Canada, Air Transat and Air Canada Rouge overlap in many ways—so much so that it would give you the equivalent of 60% of the Canada-Europe capacity and 45% of the capacity for sun destinations, according to the Competition Bureau Canada. We also know that you are demanding a downsizing plan in the new sale agreement.

If the sale goes through, what will happen to the Air Transat employees?

Can you guarantee that their jobs will be protected? Can you tell us how many people will lose their jobs?

[David Rheault]

Once again, your question has many aspects to it.

So I will take this opportunity to complete what my colleague said during his presentation.

Saying that a merger between Air Canada and Air Transat in the transatlantic market would be like merging Bell and Rogers is inaccurate and misleading. There are much larger companies in that market than Air Canada and Air Transat combined, such as WestJet's partners, companies like Air France and KLM, which have leading positions at Paris Charles de Gaulle and Schiphol, two of Europe's biggest hubs that serve all of Europe that offer many options to Canadian and Quebec passengers.

With respect to the approval of the transaction, over the past 18 months, Transport Canada has gone through a thorough consultation process, seeking the views of the public, consumer groups, airports, provincial and municipal governments, as well as suppliers. We are therefore awaiting its public interest analysis. We look forward to its decision and are confident that the transaction will benefit consumers and all stakeholders.

As Mr. Eustache said, it's the best choice for all stakeholders, customers, employees, suppliers, shareholders, and for the community.

As far as jobs go, to go back to your point, in my opinion, this transaction will allow us to do more maintenance in Quebec. We have made that commitment.

Also, the unions representing Air Transat and Air Canada employees supported this transaction, because a carrier of this calibre will be able to compete more effectively with major US and European carriers. It will create and keep jobs at home.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Rheault, and thank you, Mr. Barsalou-Duval.

We're now going to move on to the NDP.

Mr. Bachrach, you have the floor for six minutes.

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

Thank you very much, Mr. Chair.

Thank you to all of our witnesses for being here today.

My first questions are for Mr. Rheault. Since the start of the pandemic—and I believe you've shared these statistics already—could you remind us how many Air Canada employees were laid off?

[David Rheault]

It is about half of our workforce.

It's approximately 20,000 employees.

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

In terms of numbers of employees, can you give a round figure?

[David Rheault]

20,000

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

How many of those laid-off workers are also receiving the wage subsidy?

[David Rheault]

With respect to the wage subsidies, as my colleague said, those subsidies have allowed us to maintain jobs. In fact, Air Canada was one of the early adopters of the wage subsidy—I think it was in April and May—which allowed us keep all of our employees at the time.

However, it became apparent at some point that we would not be in a position to recall all of our employees in the short term, which was, in fact, the purpose of the program. We worked a lot with our union to mitigate the job losses, but unfortunately we had to reduce our workforce. As an example, today we operate approximately 20% of our network with 50% of our employees.