Evidence of meeting #9 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 regional.
A recording is available from Parliament.
Liberal
Chris Bittle Liberal St. Catharines, ON
I'd like to clarify something that you said. You talked about a tax increase with respect to Nav Canada. You agree with me that the government did not raise taxes and that Nav Canada is an independent agency.
President and Chief Executive Officer, National Airlines Council of Canada
I would take a look at Nav Canada's press release from May. They did state in there that they had engaged the government to try to get support so that they would not have to follow through with the increase in navigational fees, and the government said no to that request.
Liberal
Chris Bittle Liberal St. Catharines, ON
My question was about a tax increase. It's not a tax increase.
President and Chief Executive Officer, National Airlines Council of Canada
To be mildly direct, I think within the context of Ottawa's debate, the fee and the tax are two different things, but has it increased the cost of aviation and flying in Canada? Yes, it has. Whether you wish to call it a fee or a tax, to us in the industry it's somewhat immaterial.
Liberal
Chris Bittle Liberal St. Catharines, ON
Well, when you're calling it a tax, you're suggesting it's the government levying it, not an independent agency. I'm just surprised at the language used.
President and Chief Executive Officer, National Airlines Council of Canada
It's an independent agency, sir, that derives its mandate from the statute of Parliament as a monopoly on the service provision of navigational services for safety purposes. Its entire mandate flows from the federal government, and the federal government has representation with Nav Canada.
Again, for the industry, honestly, whether it's a fee or a tax, Nav Canada went to the government and did not receive support in the midst of this crisis, so they brought in a 29.5% increase. That only represents a third of the budget shortfall they are projecting. That is all in the public realm through the release in the summer.
Liberal
The Chair Liberal Vance Badawey
Thank you, Mr. McNaney and Mr. Bittle.
We'll now go to Mr. Barsalou-Duval for six minutes.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you very much, Mr. Chair.
My first question is for Mr. Larivière.
Mr. Larivière, we have just talked about the challenges airlines are facing due to COVID-19. We know that Air Canada has cancelled some thirty routes throughout Quebec. That's when you began your efforts, as the opportunity to offer the regions a different type of transportation than Air Canada was becoming a reality.
In the information provided by the minister, we can see a willingness to have airlines refund tickets contingent upon assistance, which is a good thing. But the minister's letter mentions the need for regional service as well, also linked to assistance for domestic airlines.
How do you feel about the fact that, in a way, regional air travel with the major airlines is being financed through this assistance? What impact might this have on smaller airlines or on the competitiveness of regional air travel?
Director General, Coopérative de transport régional du Québec
Thank you for your question.
I believe that would create a missed opportunity. The situation may be different elsewhere in Canada, but in Quebec, forcing Air Canada to go back to routes it has cancelled means forcing an airline whose primary mission, between you and me, is not to provide regional service in Quebec.
Air Canada's mission, business model, and it does it very well, by the way, is to connect us to the world. Honestly, the regional routes are there to feed hubs, to bring passengers from the regions to their flight in Montreal, essentially for Quebec. In our view, the Government of Canada would be making a bad decision if it forced something that's not natural.
You are right to say that Air Canada reducing its service offering and discontinuing several regional routes, particularly in Eastern Quebec, are triggers for us. However, the regional transport issue in Quebec started long before COVID-19. It may have been the straw that broke the camel's back.
The TREQ project is about the regions coming together to say they don't ever want it to happen again and that they don't want to go back to the old way. Either we force Air Canada to do what it doesn't want to do or we rush into another solution that could turn into a monopoly. People are tired of that. Over the last 30 years, the monopoly scenarios have not worked in Quebec. So it's time to look at the problem from another angle.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you.
Mr. Larivière, I'd like to ask you a second question.
You raised the issue of monopolies. In Quebec, Air Canada has a monopoly that rapidly takes hold in the regions through persuasive pricing policies, which are often temporary as long as the competition is there. Then prices shoot back up.
If the government intends to force Air Canada to go back to the regions, wouldn't that create a monopoly and prevent healthy competition from finally settling into the regions? What impact would it have on prices?
Director General, Coopérative de transport régional du Québec
I believe the best thing the government can do is maintain healthy market conditions. It's not that we don't want Air Canada in the regions; on the contrary. We have no problem with it, but we want Air Canada to do it without dumping.
A business with $18 billion in annual sales need only start a price war and the competition is gone just like that. That's been the problem for the last 30 years. Now we see a business opportunity with Air Canada having discontinued those routes.
Are we going to try to set up shop?
The question is, when it wants to take over those routes three or four years down the road, is Air Canada going to use predatory techniques to get rid of the competition?
It would be detrimental to all airlines on this side of the country.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you.
If I'm not mistaken, you have run airports in the past, and you have studied the measures announced by the government for airports.
Do you feel these measures will be enough to help airports? It's actually money for future infrastructure and it may not help them cover the bare essentials and pay the bills.
Director General, Coopérative de transport régional du Québec
Exactly. I wear another hat. It's me behind Mont-Tremblant International Airport and I'm the operator. I agree with my colleagues from the airport associations that airports are being massacred right now. Much like the airlines, losing our strategic assets, even the employees we must let go, is devastating.
In regional airports, the employee who does the snow removal also refuels and provides the weather reports. It takes years to train these employees. When we lose them, it takes years to get back to where we were. That is what's happening right now because of the pandemic.
Many of the smaller airports don't need huge amounts of money to make it to the other side.
I agree with Mr. McKenna, Mr. Gooch and Mr. Grant on the need to support all airports. An effort is being made for the major airports, but I believe this government effort must also include all regional airports.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you very much, Mr. Larivière.
My question is for the ATAC or even the CAC.
Liberal
The Chair Liberal Vance Badawey
Mr. Barsalou-Duval, my apologies. The time's up.
I now have to go to Mr. Bachrach. Those were great questions, and thank you, Mr. Larivière.
Now, Mr. Bachrach, the floor is yours for six minutes.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair. I'd like to start with some questions for Mr. Grant.
Mr. Grant, as I'm sure you're aware, small airports are vital to the quality of life in northwest British Columbia, the region I'm so pleased to represent. Airports in communities like Smithers, Terrace, Sandspit, Bella Bella and Bella Coola have all struggled during the pandemic, but I want to step back a little bit because a lot of these small and regional airports were originally owned and operated by the federal government and were transferred, were downloaded, to local governments to run several years ago.
Has the federal government provided communities and local governments with adequate resources to operate these airports in a way that is safe and that provides the services that citizens expect?
Chair, Regional Community Airports of Canada
I think the easy answer is no. Certainly there has been some attempt by the federal government to fulfill its mandate in giving us some capital funding, but the large majority of airports, as you mentioned, in not been able to even participate because the funds simply aren't there to match the contribution agreements.
There's been nothing in the way of operational support since the late 1990s. These airports were transferred strictly to municipalities and local community governments, and the load is being borne by them.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Grant, you mentioned earlier that these small airports really suffered because they weren't able to access some of the pandemic support that was offered by the federal government, especially the wage subsidy. I'm assuming that your organization advocated to the federal government that municipal airports should qualify for that funding. What was their response?
Chair, Regional Community Airports of Canada
We certainly did advocate, and we identified that there basically has been no ability for small and regional airports to take advantage of many of the programs. We mentioned that we needed to address the issue with the queues, but we have still not had an answer to that. We do not even have an idea of whether and when that may be discussed.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Do you think it's fair that the larger airports are able to access the wage subsidy and small and regional airports haven't been able to?
Chair, Regional Community Airports of Canada
I wouldn't say it's an issue of fairness. I think it's simply an issue of education and not being able to understand that there are other airports out there. Certainly we feed the large airports, and they need to have that support. Smaller airports seem to have been carved away and forgotten about, as though they are just regional cost centres, so we haven't really had any attention from the federal government.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Mr. Grant, you mentioned the ACAP program earlier. As a former mayor, I can attest to the importance of this program. The reality is that funding for ACAP has been stalled for decades at about $38 million per year.
I understand you're advocating an increase to $95 million per year. What's that number based on, and what would that kind of stable permanent funding allow small regional airports to do in their operations?
Chair, Regional Community Airports of Canada
I think the important part is that the airports capital assistance program has not been topped up since the early 2000s. The $95 million we have advocated—for over the past four years, as a matter of fact—simply addresses the infrastructure inflation rates in order to accommodate the rehabilitation of most of our infrastructure.
At this time, the $95 million, if it is accessible to more participants or is accessible to more airports at a lower contribution rate, won't do it. That's an adjustment just to meet the current inflationary demand since 2001.