Transport Committee on Dec. 1st, 2020

[The Chair, Liberal, Vance Badawey]

I call this meeting to order. Welcome to Meeting number eight 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 September 23. The proceedings will be made available via the House of Commons website. So that you are aware, the webcast will always show the person speaking, rather than the entire 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 either 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 yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. I will 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 a speaking list, the committee clerk and I will do the best we can to maintain the order of speaking for all members, whether they be participating virtually or in person.

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

Now I would like to welcome our witnesses. Between 3:30 and 4:30, we have from the Canadian Transportation Agency, the CTA, Scott Streiner, chair and chief executive officer; Valérie Lagacé, senior general counsel and secretary; and Marcia Jones, chief strategy officer. From the Department of Transport, we have Lawrence Hanson, assistant deputy minister, policy; Aaron McCrorie, associate assistant deputy minister, safety and security; Nicholas Robinson, director general, civil aviation; Colin Stacey, director general, air policy; Christian Dea, director general, transportation and economic analysis and chief economist. Welcome, all you folks.

With that, I'm going to move to our witnesses. I'm not sure who has been queued to start us off with their five-minute presentation. I'll leave that up to you folks. The floor is yours.

[Lawrence Hanson, Assistant Deputy Minister, Policy, Department of Transport]

Thank you, Chair, I will begin.

Honourable members, thank you for the invitation to speak to you about the impact of the COVID-19 pandemic on the air transport sector in Canada.

My name is Lawrence Hanson, and I'm the ADM of policy at Transport.

Owing to the fact that Canada is a very large country with a widely dispersed population, and has a material number of people for whom the air mode is the only viable source of supply for parts of the year, we rely on air travel more than many other countries.

Canada has built a strong and effective air transport system that connects Canadians to each other and the world. It supports tourism, regional economic development, and an aerospace supply chain that produces aircraft with world-leading environmental performance.

The air sector employs about 108,000 people in Canada. Although the pandemic has had an impact on every sector of the economy, the decline in the air sector has been the most severe, and its recovery is expected to take relatively longer. Eight months into the pandemic, passenger levels are still down almost 90% from the same period last year.

Canada's air system has been traditionally funded by passengers themselves. Currently, however, we have a user-pay system that has almost no users. Consequently, airlines and airports continue to face significant fixed costs with little or no off-setting revenue.

Inevitably, this has led to efforts by key players to either find new revenue or, more likely, cut costs. There have been widespread layoffs, route suspensions and cancellations by airlines. Airports and the non-profit corporation that provides air navigation services, Nav Canada, have raised rates and fees.

Over and above these negative outcomes, Canadians across the country have received vouchers in lieu of refunds for travel cancelled due to the pandemic, and they are understandably angry.

To mitigate the severe impact and instability caused by the pandemic across all sectors, the government has implemented broad-based measures like the Canada emergency wage subsidy. These have been helpful in providing initial stability for air operators.

In addition, in March, the government waived payments for airport authorities that lease airports from the federal government for the remainder of 2020. The government also took action to ensure service to remote communities that rely on air transport for essential goods and services, with funding of up to $174 million announced in August, and a separate program of $17.3 million announced in April for the territories alone.

However, the impacts on the air sector during COVID-19 are without precedent, and service providers are unable to respond to these ongoing challenges on their own. This threatens the ability of Canadians to access reasonable air transport services at a reasonable cost, and these impacts could have important implications for communities, regions and the wider economy. It also threatens the many jobs in air transport and in the industries that rely upon it.

That is why, on November 8, Minister Garneau announced that in order to protect the interests of Canadians, the government is developing an assistance package for Canadian airlines, airports and the aerospace sector. Yesterday's fall economic statement provided additional information regarding rent and infrastructure support that will be provided to airports.

The minister's statement made it clear that support to air carriers would be dependent on securing real outcomes for Canadians, including the provision of refunds in place of vouchers, maintaining regional connectivity, and remaining good customers of the Canadian aerospace industry.

Helping to ensure the economic viability of the sector, and protecting the interests of Canadians is a necessary but not a sufficient condition for the successful restart of the air industry. It will also be important to ensure that air travel remains safe and secure, and addresses the added public health dimension created by the pandemic.

For that and related issues, I will turn to my colleague, the associate assistant deputy minister of safety and security at Transport, Aaron McCrorie.

[The Chair, Liberal, Vance Badawey]

Mr. McCrorie, the floor is yours.

[Aaron McCrorie, Associate Assistant Deputy Minister, Safety and Security, Department of Transport]

Thank you, Mr. Chair.

Good afternoon. It's a pleasure to be here.

I'm Aaron McCrorie, the associate assistant deputy minister for safety and security at Transport Canada.

Since the outbreak of the COVID-19 pandemic, guided by the latest public health advice, Transport Canada has worked hard to respond quickly to ensure that Canadians remain safe while supporting the ongoing flow of critical goods and services across the country.

To reduce the risk of transmission of COVID throughout the aviation sector, Transport Canada has worked with partner departments, public health authorities, provinces and territories and the transportation industry to implement a system of layered measures, guidance, and requirements to ensure that transportation operations are safe for workers and passengers.

These include health screening measures and temperature checks to prevent symptomatic passengers from boarding flights to, from and within Canada. Workers at the 15 busiest airports in Canada are also subject to temperature checks before entering restricted areas. In addition, passengers on all flights departing or arriving at Canadian airports must have an appropriate mask or face covering when going through security checkpoints, when boarding and deplaning and on board the aircraft. These requirements also apply to some air crew members and airport workers.

The department also issued a notice restricting most overseas flights to landing at four airports in Canada: Montreal-Trudeau, Toronto-Pearson, Calgary, and Vancouver. This was done to support the work of health authorities to conduct medical assessments of symptomatic passengers and to notify passengers of the need to self-isolate for a period of 14 days. Transport Canada acted quickly to protect Canadians and air travel passengers to reduce the risk of transmission on an aircraft and the risk of importation. Making sure air travel is safe is a key factor in supporting the recovery of the air sector.

On August 14, Transport Canada released “Canada's Flight Plan for Navigating COVID-19”. This document is the foundation for aligning Canada's current and future efforts to address the safety impacts of COVID-19 on the aviation sector and was developed in close collaboration with industry partners. It demonstrates to Canadians the extensive and multi-layered system of measures that have been implemented to support public health, including temperature checks, health checks and face coverings as well as measures implemented by industry such as increased cleaning and disinfecting protocols, enhanced air conditioning and filtration systems and new protocols to encourage physical distancing.

Canada's flight plan is based on the comprehensive standards and recommendations from the International Civil Aviation Organization's Council Aviation Recovery Task Force, or CART, in order to ensure that Canada is aligned with the gold standard of international best practices. This document will be refined as we continue to learn more about COVID-19 and as guidance and public health measures evolve at the local, provincial, national and international levels.

Preventing the spread of the pandemic has been and remains the top priority of the government. The various regulatory requirements that were put in place will likely remain for the foreseeable future; however, there is room for adjustment to support the restart of the air sector. Transport Canada will actively assess orders that have been issued to see what can be done and will be consulting with industry on possible amendments as we move forward.

The department is also working closely with other federal departments to explore risk-based opportunities that will allow Canada to ease travel restrictions and reopen our borders. This includes implementing a sustainable approach to reducing public health risks today and building resilience to safeguard the system against similar risks in the future. For example, by leveraging opportunities for safe, contactless processing of passengers, these approaches will help rebuild public confidence in the safety of air travel.

Health Canada and the Public Health Agency of Canada, working with other key federal departments such as Global Affairs Canada, Transport Canada and the Canadian Border Services Agency, are responsible for making decisions related to the lifting of travel and quarantine restrictions. Presently, testing pilot projects are under way or in development across Canada to establish a good base of evidence for possible reduction of quarantine requirements. For example, Air Canada and the Greater Toronto Airports Authority, in partnership with McMaster University, launched a testing project in September focused on testing passengers arriving in Canada.

The Public Health Agency of Canada, in partnership with the Province of Alberta, launched a testing project in November for passengers and workers arriving by land at Coutts border crossing and by air at the Calgary International Airport.

[The Chair, Liberal, Vance Badawey]

You have one minute, Mr. McCrorie.

[Aaron McCrorie]

Thank you, Mr. Chair.

It's clear that ensuring a healthy and safe transportation sector is essential for reopening borders, restarting the tourism industry, and for the safety and security of Canadians at large. Transportation will play a vital role in supporting the country's economic recovery. Continued collaboration and shared insights are crucial in overcoming the challenges this pandemic has brought to the air sector. That is why the department will continue its important engagement with stakeholders and other partners as we work to address challenges faced by the air sector in Canada today and to ensure that we have a strong industry into the future.

Thank you very much.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. McCrorie, and thank you, Mr. Hanson.

Do we have other witnesses who wish to speak? Is anybody speaking from the CTA?

Mr. Streiner, the floor is yours for five minutes.

You are on mute, Mr. Streiner.

[Scott Streiner, Chair and Chief Executive Officer, Canadian Transportation Agency]

Okay: Can you hear me now?

[The Chair, Liberal, Vance Badawey]

You're good to go.

[Scott Streiner]

All right. This is our lives now, eh? We have to overcome all these technical issues.

I will start again. Thank you, Mr. Chair.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Streiner.

[Scott Streiner]

I want to thank the committee for inviting my colleagues and me to appear today.

We're living through an unusual and difficult time. I hope all of you and your loved ones have remained healthy and safe over the last nine months. While we have our respective roles to play, we are, first and foremost, fellow citizens.

I have the privilege to lead the Canadian Transportation Agency. The CTA was established in 1904 and is Canada's second-largest independent, quasi-judicial tribunal and regulator.

At no time in the century since the dawn of commercial aviation have airlines and their customers gone through the sorts of events we have witnessed since mid-March. Canadian airlines carried 85% fewer passengers between March and September 2020 than during the same period in 2019. Such a collapse in volumes is without precedent.

Through this turmoil, the Canadian Transportation Agency has worked to protect air passengers. Despite the fact that almost every CTA employee has worked from home since the pandemic struck, the 300 dedicated public servants who make up the organization have spared no effort to continue providing services to Canadians.

Immediately after the crisis began, we updated our website with key information for travellers so that those scrambling to get home would know their rights. We temporarily paused adjudications involving airlines to give them the ability to focus on repatriating the Canadians stranded abroad. We took steps to ensure that no Canadian who bought a non-refundable ticket would be left out-of-pocket for the value of their cancelled flights. We worked around the clock to process and issue the air licences and permits required for emergency repatriation flights and cargo flights to bring urgently needed PPE to Canada.

In the subsequent months, we invested substantial resources and long hours to deal with the unprecedented tsunami of complaints filed since 2019. Between the full coming into force on December 15, 2019, of the air passenger protection regulations, the APPR, and the start of the pandemic three months later, the CTA received around 11,000 complaints—a record. Since then we've received another 11,000.

To put these numbers in perspective, in all of 2015, just 800 complaints were submitted. In other words, we've been getting more complaints every two to four weeks than we used to get in a year.

We've already processed 6,000 complaints since the pandemic reached Canada. By early 2021, we'll start processing complaints filed during the pandemic, including those related to the contentious issue of refunds. If the recently announced negotiations between the government and airlines result in the payment of refunds to some passengers, a portion of those complaints may be quickly resolved.

On the topic of refunds, it's important to understand that the reason the air passenger protection regulations don't include a general obligation for airlines to pay refunds when flights are cancelled for reasons outside their control is that the legislation only allows the regulations to require that airlines ensure that passengers can complete their itineraries. As a result, the APPR's refund obligation applies exclusively to flight cancellations within airlines' control.

No one realized at the time how important this gap was. No one foresaw mass, worldwide flight cancellations that would leave passengers seeking refunds frustrated; airlines facing major liquidity issues; and tens of thousands of airline employees without jobs.

Because the statutory framework does not include a general obligation around refunds for flight cancellations beyond airlines' control, any passenger entitlements in this regard depend on the wording of each airline's applicable tariff. Every refund complaint will be examined on its merits, taking the relevant tariff language into account.

[The Chair, Liberal, Vance Badawey]

You have one minute, Mr. Streiner.

[Scott Streiner]

Thank you, Mr. Chair.

The APPR rules are among the strongest air passenger protection rules in the world. They cover a wider range of passenger concerns than any other regime, but we now know that the gap highlighted by the pandemic is significant. If and when the CTA is given the authority to fix that gap, we'll act quickly.

Just before wrapping up, Mr. Chair, I'd like to mention one more area where the CTA has been active: accessibility.

Since the groundbreaking accessible transportation regulations came into effect last June, we've been providing guidance to Canadians with disabilities and to industry to ensure that these new rules are well understood and respected, and we've continued to play a leading role in encouraging the aviation sector in Canada and around the world to integrate accessibility into the rebuilding process. Persons with disabilities should not be left behind as air travel gradually recovers.

Let me conclude, Mr. Chair, by noting that because of the CTA's independent status and the quasi-judicial nature of our adjudications, it would not be appropriate for me to comment on government policy or on any matters that are currently before the CTA, but within those limits, my colleagues and I would be happy to respond to any questions the committee may have.

Thank you, Mr. Chair.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. Streiner, and to all our witnesses, thank you.

Are there any more witnesses who would like to speak? I see none.

We're now going to our first round of members' questions for six minutes, starting off with the Conservative Party and Ms. Kusie, followed by the Liberal Party and Mr. Rogers, and then the Bloc Québécois, with Mr. Barsalou-Duval, and the New Democratic Party, with Mr. Taylor Bachrach.

Ms. Kusie, you have six minutes. The floor is yours.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair. I appreciate the opportunity to have these witnesses before us today.

Thank you very much for being here.

I'm going to start by going back to Mr. McCrorie's comments regarding rapid testing.

As he mentioned, there's currently a pilot project going on in my hometown of Calgary, in my home province of Alberta, a project in YYC and Alberta that we are very proud of. What it allows individuals to do, of course is to take the COVID test upon arrival and, if they receive a negative test, to reduce their quarantine going forward.

I'm wondering if I can get some information as to how long it took Transport Canada, as well as other various governmental departments, to get this pilot project under way.

[Aaron McCrorie]

Thank you for the question, Mr. Chair.

When it comes to the pilot projects, the testing projects, we've been playing a supporting role. I hate to defer the question, but I think for you to get a sense of the timelines and the level of effort to get it launched, you'd probably be better off asking our colleagues from the Public Health Agency of Canada and Health Canada, who are joining you, I believe, after this session. They were the leads in terms of putting the pilot in place.

I can say that Transport has played a supporting role over the last several months, in particular in working as a liaison between PHAC and Health Canada and the airport authority and the airlines involved and helping to facilitate those relationships. The actual implementation of the test and the design of it fell to our colleagues in the Health portfolio.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. Thank you very much, Mr. Chair.

Can you confirm, though, that you are in the process of implementing this at other airports across the country?

[Aaron McCrorie]

Again, when it comes to the implementation of the pilots themselves, typically it's going to be Health Canada and PHAC that are the leads, but there are other pilot projects that are being contemplated. The Vancouver airport is contemplating a pilot project, for example, and I believe Montreal is. There is a series of pilot projects that are being contemplated, and we're doing our best to support them.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. I'm going to go, then, to the announcement yesterday in the fall economic statement, which said:

To further assist airports to manage the financial implications of reduced air travel, the government proposes to provide $65 million in additional financial support to airport authorities in 2021-22.

Would you, Mr. McCrorie or Mr. Hansen, be able to provide any further information as to how these funds will be distributed and when they'll be distributed, and again, as you mentioned briefly, I believe, in the opening, the conditions tied to the money?

[Lawrence Hanson]

Thank you very much, Chair.

With regard to the FES announcement yesterday, I'm not really in a position to give any additional details beyond what the Minister of Finance laid out yesterday. I would note that the conditional points really related more to a potential agreement and support for airlines, as opposed to yesterday's funding, which was more exclusively directed toward airports.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Okay. I appreciate that.

Of course, I'm sure you saw across the media that there was widespread disappointment from the airline sector. It certainly fell significantly short of the October 1 ask of $7 billion.

I was wondering if the government had conducted a comparative analysis of how Canada could support the sector compared with other nations and, if so, what it concluded. Are there supports for the airline sector that we've seen in other nations compared with what was offered to the Canadian airline sector yesterday?

[Lawrence Hanson]

Thank you, Chair.

Certainly, we have looked at what other countries have done. The comparisons are different, of course, because sometimes it's in support for individuals versus support for carriers. Some countries have taken equity positions in carriers. We have done those comparisons. It's not always easy to get to an apples to apples comparison.

When it comes to a final comparison with what's done in the airline sector, obviously it will ultimately be dependent on what the eventual terms of an agreement with the air carriers looks like.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Would you be able to table your research and the conclusion up to this point of what has been evaluated versus what was offered yesterday and versus what will be offered in the future?

[Lawrence Hanson]

Chair, we would be happy to provide information on what we have learned about other countries' supports. To be candid, we have compiled information that is quite largely publicly available.

Obviously, we can't speculate on what future support might look like here in Canada.