Transport Committee on Dec. 3rd, 2020

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

Mr. McNaney, I certainly understand the impact on the air transport sector and the need for federal support. I think that a lot of Canadians are looking at these big financial packages and seeing that in the past, some of those federal contributions have gone to executives and to shareholders.

We've been saying very clearly that we feel that any federal support for the sector should go straight to workers to make sure that people remain employed and that it should not go to executives and shareholders. Do you think that's a reasonable expectation for the Canadian public to have with regard to sectoral support from the federal government?

[Mike McNaney]

I think it's a reasonable expectation. I think we also have to look at what industry—at least my side of the industry—is asking for, and that is loans and loan guarantees. I do think that is a reasonable enough ask. In terms of the details, etc., I'm sure the federal government will avail itself of everything it needs to, but at this point we do not know what the tone and tenor of any support might actually be.

[The Chair, Liberal, Vance Badawey]

You have time for a short question, Mr. Bachrach.

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

The minister has said that no dollars are going to flow until the airlines refund the passengers who had their flights cancelled. Do you think that's a reasonable expectation?

[Mike McNaney]

I think it's a reasonable expectation in the minister's view, and I'm fully certain that whatever comes forward is going to be commensurate with that view.

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

Is it reasonable in your view, Mr. McNaney?

[Mike McNaney]

In my view, to be honest with you, reasonableness would have been that seven months ago the situation would have been addressed and financial assistance to the industry would have been provided on a robust basis and we would not find ourselves having these elements of conversation with respect to the number of flights that have been cancelled and the number of layoffs we've had.

[The Chair, Liberal, Vance Badawey]

Thank you, Mr. McNaney. Thank you, Mr. Bachrach.

I'm now going to go to Mr. Shipley for five minutes. Mr. Shipley, you have the floor for five minutes.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Chair. I wasn't sure I was going to get those five minutes. I was starting to think we were—

[The Chair, Liberal, Vance Badawey]

I'm trying to squeeze them in.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

I appreciate that. I'll try to make good use of them. I had even closed my notes, so just give me a moment.

My first question is for Mr. McKenna.

Mr. McKenna, in your opening comments, you made a statement that intrigued me, and I wrote down what you said. You said you wrote six different letters and had no acknowledgements back. Could you explain to me when those were sent—not specific dates, but roughly when—and to whom those were sent and what was requested in them?

[John McKenna]

We have written letters basically every month since March to the Minister of Transport, the Minister of Finance, the Minister of Economic Development and the Prime Minister. Basically we are doing two things. We are identifying what kind of help would be required and we're offering our services, our co-operation, to work toward such a program. That's what we offered, and we keep offering the same thing much in the way I spoke about today in my opening statement.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Just to clarify, you mentioned that you haven't heard back on any of those letters whatsoever.

[John McKenna]

That's right. We have not had any kind of response to any of those from anybody.

We are talking to the ministers' offices; I have to be frank on that. They do return our calls. We have a conversation going on with them, but it's not really a dialogue. We're asking for things, and they're saying, “Well, we feel your pain and we're trying to do something to help you.” Basically that's what we're getting as an answer, but we've had no formal responses at all to any of our letters.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

The next question is for Mr. McNaney.

Mr. McNaney, you mentioned in your opening remarks that other countries started months ago and that Canada is a bit of an outlier with some programs that were offered. Could you tell us exactly where we're slipping behind, what some of those other countries have offered and where Canada is missing?

[Mike McNaney]

There are a few elements to it. At its most basic, sir, is direct sectoral support for the aviation sector, and that started to flow in other jurisdictions, in particular in the EU, back in May, and in the United States in the May-June time period, and it is consistent over a variety of things.

Some of it has been loans. Some of it has been loan guarantees, as we said. Some of it is in direct injections into operators. The whole point of it, as I said at the outset, was to stabilize the sector because of the broader role it has to play.

I want to very quickly note that Canadian carriers are in this crisis now not because we've had bad business plans or made poor corporate decisions. We're in this crisis because of the pandemic and the economic chaos of that pandemic. I certainly do not view what we are looking for as a bailout. A bailout is for an industry that got itself into trouble because it made bad decisions and people stopped buying its products, and that was not the case. We entered 2020 with a level of connectivity we had not seen—tens of thousands of jobs—and we continued to invest, but the pandemic has ostensibly laid low all of that activity.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you.

Further to some of your comments, Mr. McNaney, you mentioned that foreign operators were taking market share. That's very concerning to me. Customers are always hard to get, and when you lose one, it's very hard to get it back.

Flying isn't banned in Canada; it's just a little more difficult. What is it that is causing us to lose market share to foreign competitors?

[Mike McNaney]

We're losing that market share, sir, because as they have continued to receive support, they have been able to keep more capacity in the market than Canadian operators are able to do, and what we are seeing over time is that they are starting to pick up more and more of the capacity of those particular international routes. It has taken Canadian carriers years to muscle their way in on these routes.

You're absolutely right that once you have lost customers, it's extremely hard to get them back, and it's particularly difficult in aviation, where carriers compete ferociously with each other on long-haul service.

We basically, to some degree, ceded the playing field to these international operators. Because they are receiving investments and support from their governments, they are able to keep a level of capacity beyond what they used to be able to, and now we are falling behind.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you.

Chair, I still have a bit of time, do I?

[The Chair, Liberal, Vance Badawey]

You have 30 seconds.

[Doug Shipley, Conservative, Barrie—Springwater—Oro-Medonte, ON]

All right, I'll make this a very quick question.

I'm not sure who to direct this to. It's with regard to much smaller airports. For example, an airport like Thunder Bay airport, a very small regional airport, has had almost no traffic, but there are still some fixed costs there, which are now being passed on to the few surviving regional small airlines that are drastically needed to service the north and many of the indigenous communities in Ontario. Those fees that are being passed on to those small airlines that are still managing to fly are just not doable.

What can be done for these small airports where costs for things like fire, emergency or snowplowing are all being passed on now to these small regional airlines that just can't pay the additional costs because the other airlines aren't flying?

Can one of you gentlemen help me out with that and say how we can help these smaller ones and these remote airlines?

[The Chair, Liberal, Vance Badawey]

I will ask whoever wants to try to answer that question to try to fit it into an answer for the next speaker.

I'm going to move to Mr. Rogers for five minutes. He will be the last speaker of the day, so if one of you can try to incorporate your answer to that question into the answer to one of his questions, that would be wonderful.

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

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Mr. Chair. I was thinking that we were running out of time.

I welcome all the witnesses today and thank them for the information and insights they've provided.

Mr. Grant, the fall economic statement contains a significant boost to ACAP, the airports capital assistance program, as well as up to $206 million over two years, starting in 2020-21, to the regional development agencies for new regional transportation initiatives. How might these measures help your members and what kinds of projects do they help to fund?

[Brian Grant]

Thank you.

The airports capital assistance program will fund capital things such as runway overlays, runway rehabilitations, lighting, equipment used to maintain the runways and other safety measures strictly related to passenger air service.

On the $206 million, we're still waiting for information on just exactly what sectors that will involve. We don't expect a lot from that, as the small regional airports operations and the ability to pass on as little of a fee cost as possible is where we're at. It goes back to the last question about what we can do with those fees. The small airports are actually very limited in what they can do going forward. We have already cut everything to the bare bones and, unfortunately, support is the only answer, I believe, to keeping those fees low.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Mr. Grant.

Mr. Gooch, help us understand the importance of the airline industry and the importance of airports by explaining the role that airports play in connecting communities, and even the country as a whole, particularly in small rural parts of Canada.