Evidence of meeting #15 for Transport, Infrastructure and Communities in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was employees.
A recording is available from Parliament.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Rheault, I didn't quite hear an answer there, but I'm assuming that the employees who have been laid off are not receiving the wage subsidy. I know there are other companies that have used the wage subsidy to furlough their employees and keep them whole through the use of the wage subsidy.
Is that a strategy that your company has employed during the pandemic, to take the wage subsidy and keep employees on the payroll, using the wage subsidy instead of fully laying them off?
Managing Director, Government Affairs and Community Relations, Air Canada
We did that, and we still have employees on the CEWS who are inactive. At the beginning of the pandemic, we did that for all employees. However, it became apparent at a point that we would not be in a position to maintain all of our employees, because we have no horizon for recovery. That's when we took the decision...and we worked with the union to mitigate job losses.
The issue with the CEWS is that despite the fact that the government subsidizes part of the salary, which we are grateful for, it's not covering all costs. In a situation like we are in, we have to mitigate our loss. We had to make these decisions to preserve our liquidity to be in a better position to recover from the crisis.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Rheault, public reporting suggests that since the start of the pandemic, Air Canada has received approximately $492 million in wage subsidies. That would make it the largest recipient of the wage subsidy in Canada.
Are these figures accurate?
Managing Director, Government Affairs and Community Relations, Air Canada
I need to look at the exact number, but the amount of CEWS that we have received was disclosed in our latest financial statement. I think it was about $400 million, so it depends on when you get this information, but yes, it might be accurate. I don't know the exact number, but it might be accurate.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Okay, that is a ballpark figure.
Since Air Canada started receiving the wage subsidy, has the company paid any dividends to shareholders or any bonuses to executives since the start of the pandemic?
Managing Director, Government Affairs and Community Relations, Air Canada
No.
NDP
Managing Director, Government Affairs and Community Relations, Air Canada
To my knowledge, Air Canada has never paid dividends to its shareholders for years.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Right.
My understanding is that Air Canada has been providing vouchers for flights, as opposed to full refunds for flights that have been cancelled. That's been widely reported in the media.
Could you tell us roughly how many tickets have been affected by that practice of providing vouchers?
Managing Director, Government Affairs and Community Relations, Air Canada
I don't have that number, sir.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Could you tell us what the approximate monetary value of tickets affected by the process of providing vouchers instead of refunds might be?
Managing Director, Government Affairs and Community Relations, Air Canada
I don't have that number, but it would be significant.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Okay.
Air Canada's financial statements for the third quarter of 2020 indicated the company had $7.7 billion in short-term liquidity, including $3.79 billion of cash on hand.
Can you explain to Canadians why it is that a corporation with billions of dollars can't fairly refund their customers for services that were never provided?
Managing Director, Government Affairs and Community Relations, Air Canada
I would say that our refund policy is compliant and in line with all CTA statements and orders. We have abided by the terms and conditions of our tariffs, which are filed and approved by the Canadian Transportation Agency.
We have refunded over $1.2 billion to our consumers from the beginning of the pandemic.
To your question, we need to preserve our liquidity to be in a position to be able to recover from that crisis. If you look at the numbers now, you see that international competition is gaining back a lot of market share, and we have to be prepared to go back into the market, take back our market share and employ more Canadians. That's why we are preserving our liquidity.
Liberal
The Chair Liberal Vance Badawey
Thank you, Mr. Rheault.
Thank you, Mr. Bachrach.
We're now going to move to our second round. We have, for five minutes, Mr. Kram from the Conservatives and Mr. Rogers from the Liberals. Following that we have two and a half minutes for Mr. Barsalou-Duval from the Bloc and two and a half minutes for Mr. Bachrach from the NDP.
Mr. Kram, you're on the floor for five minutes.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Thank you, Mr. Chair.
I'd like to welcome the representatives from both Air Canada and WestJet to our committee today. I have a great deal of respect for both of your companies and I'm certainly looking forward to flying your airlines a lot more in the future as we come out of this pandemic.
My question is for both groups of witnesses.
On Tuesday, the committee heard testimony that because of all the challenges facing the aviation sector, it may take anywhere from five to seven years for air travel to recover. I found this to be very surprising since the vaccine rollout is to be completed by the end of this year.
Are the witnesses from Air Canada and WestJet expecting air travel recovery to take five to seven years, or are you expecting the timeline to be somewhat shorter than that?
Director, Government Relations and Regulatory Affairs, WestJet Airlines Ltd.
Thank you, Chair.
Thank you, Mr. Kram, for your words and thank to your constituents for making us the number one airline in Saskatchewan year over year.
If you had asked us in mid-March last year where would we be on February 4, 2021, it would not be where we are today.
Lots of people are throwing out a lot of prognostications, but you nailed it. Without a better understanding of what the operational realities will be for our company, it's really difficult to say, and that's why we're pushing so hard for a safe restart plan, and to understand how the government looks at vaccines and at testing.
You raised the issue of vaccines. We're watching very carefully and engaging very constructively with the government because we need to understand the correlation between vaccination and mobility for Canadians.
The retired couple who live in your constituency and who haven't seen their grandkids in a year, do they expect they'll be able to see them after they're vaccinated? Does vaccination green-light you to travel this country? What is an acceptable vaccine rate that would allow for such travel? These are the key questions. I think we would recommend that in your report you ask public health officials for clarity for public health purposes, not for business purposes.
It's that certainty and reassurance that I think all of us want and seek, but I think until we have more certainty around vaccines and what they mean for the critical travel and tourism sector, it's difficult to answer your question. It's safe to say that it will take years, but we can start here in Canada this summer.
Thank you.
Managing Director, Government Affairs and Community Relations, Air Canada
I'm going to add to my colleague's comment.
It's important to have a plan and a perspective. The International Air Transport Association, or IATA, forecasts a return to 2019 traffic volumes within three to five years. With the vaccine rollout to the public being planned, it's important to have a plan in place now to safely resume travel. The most important thing is to get the wheels turning again. Aviation is an ecosystem of carriers, airports, related services and suppliers. It's all of those things. So, for everyone's benefit, it is important to have a plan to get the machine back up and running.
Conservative
Michael Kram Conservative Regina—Wascana, SK
Again, I would like to hear from both Air Canada and WestJet.
In regards to Nav Canada's potentially laying off air traffic controllers and closing down air traffic control towers, including the one at Regina International Airport, when an airport loses its air traffic control tower, does it cause airlines to re-evaluate the number and frequency of flights going into and out of the city?
Liberal
Director, Government Relations and Regulatory Affairs, WestJet Airlines Ltd.
We feel for Nav Canada employees and everyone in our sector who's hurting. That's why we've been pushing the government to resolve their financial issues.
On the specific element of your question, we fly to airports that have towers and airports that don't. We fly to airports that have towers part of the day, and not other parts of the day, so it's not a straight line.
Also, with respect to the safety of those decisions, that is between Nav Canada and their regulator, but we're aware of the situation in Regina, and feel for those employees, for sure.
Managing Director, Government Affairs and Community Relations, Air Canada
Mr. Kram, I'm going to repeat what my colleague said and add that losing a control tower could have an impact on operations. Obviously, safety is not at stake, because other safety measures are in place. Nav Canada would never do anything to jeopardize passenger safety. On the other hand, with no control tower, for example, operations can become more complex, cause more diversions to other airports and increase costs for carriers.
All this is symptomatic of the fact that we are in a user pay system. When it's been almost a year with no users, the costs go up for everyone. Every organization has to make difficult decisions that will compromise the infrastructure over the long term. That's what you need to understand. That's why measures need to be put in place to preserve our infrastructure, to allow not only us, the carriers, but our employees and the entire transportation ecosystem, to regain the place we had in the economy.