Transport Committee on Feb. 18th, 2021

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

Thank you, Mr. Chair.

Welcome, Minister Alghabra, it is a pleasure to have you here.

Minister, in a scenario where our government would not have approved the merger, what would your main concerns have been? Why would a merger be preferable, for example, to a possible bankruptcy?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

I'm sorry, Mr. Chair, the translation.... I apologize, but perhaps my colleague can repeat the question.

I have a sense of what the question is, but I'd rather, if you don't mind, that he repeat the question.

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

I am going to repeat it in English if there is a problem with the translation.

Minister, in a scenario where our government did not approve the merger, what was your main concern? For instance, why is a merger preferable, for instance, to a possible bankruptcy?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Thank you to my colleague for his kind remarks.

I'm assuming he's talking about the acquisition of Air Transat. Recently, our government made a decision to allow for the acquisition by Air Canada of Air Transat. This was complicated. We had to examine all factors on the table. I can certainly say that the current situation within the airline sector due to COVID played a big part in our decision.

We wanted to protect jobs. Jobs were at risk. Consumer choices were at risk. The headquarters of Air Transat in Quebec was at risk. The maintenance of the fleet of Air Transat in Quebec was at risk. We wanted to make sure that we protected all of that. There was a lot of public interest at stake here. We introduced many strict conditions on this merger to make sure that we protected Canadians' interests.

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

Minister, one of this government's air transport policy priorities prior to the pandemic was to further encourage competition by making regulatory changes that would encourage the start-up of low-cost airlines, for example. Given this, I imagine that it was only with great reluctance that you approved a vision that could reduce competition.

How has the pandemic contributed to a shift in your priorities as a regulator?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

My colleague is right. We have always been committed, and we remain committed, to a competitive marketplace in the aviation sector. I think it goes without saying that COVID-19 and the travel restrictions that are caused by COVID-19 have collapsed the demand for air travel. That collapse has made short-term issues of competition less relevant. What we were more focused on was protecting jobs and the long-term sustainability of the sector. Those are the factors that we examined when we made the decision.

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

Minister, Mr. Péladeau claims that he had submitted a better offer to buy Air Transat, which would have preserved Air Transat's independence from Air Canada.

Air Transat itself states that, contrary to media reports, its proposal was in fact $5 per share and not $6.

In addition, Air Transat asserts that the proposal did not have binding and fully committed financing or proof of sufficient liquidity to proceed with the acquisition.

Finally, still according to this airline, the proposal did not provide sufficient financing to meet Air Transat's working capital requirements for 2021, estimated at approximately $500 million.

As the regulatory authority, how can Transport Canada make such claims—and thus adopt a conqueror's attitude—when assessing whether a merger should take place?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Let me just be clear. The law is very clear about what the Government of Canada needs to review. The Government of Canada can only review the transaction that is proposed before it. When we weighed the options for our decision, we looked at all of the information that was before us, including the information provided by Mr. Péladeau. I hope my colleague understands that I'm not able to get into financial specifics because of business confidentiality.

Having said that, I can ensure him—and all Canadians—that we considered all the information before us. We ended up making what we felt was the best decision to protect Canadians, to protect the public interests of Canadians, to protect jobs and to protect the long-term sustainability of the industry.

[The Chair, Liberal, Vance Badawey]

Thank you, Minister Alghabra.

Thank you, Mr. El-Khoury. Well done.

We're now going to move on to our third round of questions with respect to the Bloc Québécois.

Mr. Barsalou-Duval, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Mr. Alghabra, for almost a year, tens of thousands of airline workers have been laid off, and millions of customers have seen their money taken hostage by airlines. Canada is the only G7 country that has not helped its airline industry, nor has it forced the companies to reimburse their customers. I find this absolutely unacceptable.

People have been waiting for an eternity, and it seems you are doing nothing. Minister, you may not know it, but you're the boss.

What prevents you from imposing your conditions to save jobs and demanding the reimbursement of tickets for travellers?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

I want to thank my colleague for his kind remarks when I spoke with him early on in my appointment

I want to thank him for giving me the opportunity to say that I fully understand the financial burden of those cancelled tickets, where Canadians either had their flight cancelled or were unable to travel because of COVID. We have been very focused on making sure that those Canadians get their refund.

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

Thank you, Minister.

Do you have the power to impose conditions to ensure that people get paid back, and to save jobs?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

As I stated in my previous interactions, let me assure you that throughout the discussions we're having right now with the airline sector, protecting jobs, refunds and regional connectivity are an integral part of the discussions.

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

Thank you. I see you don't want to answer my question. However, you have that power.

I'll move on to another question, Mr. Alghabra.

You authorized the sale of Air Transat to Air Canada, which was contrary to the Competition Bureau's advice. Worse yet, the Commissioner of Competition assessed your mitigation measures and found them inadequate. In his view, the proposed adjustments to the commitments have significant deficiencies that do not address the competition concerns that are likely to result from the merger of Air Transat and Air Canada.

Why didn't you address the commissioner's concerns?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

When making a decision, my responsibility is to make a decision based on the overall public interest. I certainly took into account the issues of competition, and that's why there are conditions in the approval on price monitoring. There are conditions to make sure that any changes to pricing and any adjustments that are unjustified will be flagged, and we are going to work with the sector on making sure that we increase competition post-COVID. Right now we are focused on doing what is best for Canadians and for Canadian jobs.

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

I understand your point of view. However, I think it is also in the public interest to have competition. In light of that, you should listen to what the Competition Bureau recommends.

You authorized the sale of Air Transat to Air Canada. Yet, shortly after this authorization, Air Canada hinted that it might not even want to buy Air Transat anymore, which further jeopardized jobs and this Quebec flagship.

There was, however, another offer to purchase, that of Mr. Pierre Karl Péladeau. You never met with him.

Why did you ignore Mr. Péladeau's offer?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

First of all, we did pay attention to the correspondence that I received from Mr. Péladeau, and we examined all of his arguments. Let me just say to my colleague that if Air Transat ended up, because of lack of demand, ceasing to exist or went bankrupt, how would that help Canadians? How would that help the interest of choices in the marketplace? How would that help jobs?

We needed to make sure that we made a decision that is best for jobs, best for the marketplace today and best for Canadians and Quebeckers.

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

What I understand you to say, Mr. Minister, is that if the other offer had been accepted, Air Transat would have gone bankrupt. You are saying that a billionaire would have thrown $200 million in the garbage just for the sake of throwing $200 million in the garbage. You will understand that this doesn't make much sense.

You have two arguments to justify the sale to Air Canada: the COVID-19 pandemic and the fact that the company is going bankrupt. The reality is that the pandemic is not going to last forever and the airline industry will have to be competitive in the future. It's the same with bankruptcy. You didn't help the airline industry and a billionaire offered to buy a company.

Are you really saying that the person didn't have the money to operate this business?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

Throughout the consultation and the discussions I have had, I have found there is almost unanimity in the marketplace in support of this merger. I ask my colleague why the Quebec government has not opposed this merger and why unions are supporting this merger.

I hear him. I understand what he's saying, but we did what we thought was best for Quebecers and for Canadians.

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

We end up with Air Canada, which in the end might not even have bought Air Transat even though you authorized the transaction.

Minister, you and your government had an opportunity to support the air industry and save jobs, but you didn't do it. You had the opportunity to save a Quebec flagship, but you didn't do it. You had the opportunity to preserve competition, but you didn't.

Can you admit that your decision was not based on the public interest and that it was a purely political decision?

[Omar Alghabra, Liberal, Mississauga Centre, ON]

I understand that the honourable member has a job to do. I respectfully disagree with his analysis. In fact, almost everybody disagrees with his analysis.

I don't want to repeat why we think it's the best thing for Quebecers and Canadians and how we ended up reaching this decision, but I ask the honourable member to speak with the unions and with the Government of Quebec. Perhaps, if he doesn't take my word for it, he'll take the words of others.

[The Chair, Liberal, Vance Badawey]

Thank you, Minister Alghabra, and thank you, Mr. Barsalou-Duval. That was well done.

We're now going to move on to our last speaker of this round.

Mr. Bachrach, the floor is yours for six minutes.

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

Thank you so much, Mr. Chair.

Minister, welcome to our committee. It's good to see you. Again, congratulations on your new role.

I wanted to start my questions on the topic of NAV CANADA. I know there are a lot of concerns about this across the country.

I wonder if you could lay out for me what actions your government plans to take to halt the layoffs of the skilled professionals at NAV CANADA and ensure that the company is able to return to its high level of service and exemplary safety record as soon as the pandemic is over.

[Omar Alghabra, Liberal, Mississauga Centre, ON]

I want to thank Mr. Bachrach for his kind words, and I look forward to working with him as well as other colleagues.

He is aware that NAV CANADA is an independent private organization that makes its own operational decisions separately and independently of the government. By the way, it was designed by the House of Commons to be that way because it was seen to serve Canadians better that way.

Having said that, I have heard his concerns and even those of my colleagues in the Liberal party about potential job losses. I am aware that NAV CANADA is currently conducting studies about levels of service and the types of services they offer. I will wait to see the outcome of those studies, and I can assure you that Transport Canada will not compromise the safety of Canadians.

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

Minister, the studies you referenced have created a huge amount of uncertainty for the employees, for the companies who depend on those services and for the communities in which those towers are located. Now you, Minister, have the power to override the outcomes of those studies after the studies are completed.

Do you not agree that it would be better if the minister had the ability to remove certain towers from consideration before that uncertainty is created? My colleague Brian Masse has a private member's bill that would give you precisely those powers, and I wonder if you would support that.