Transport Committee on May 30th, 2024

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

In addition to being a lifeline for communities, it's also crucial to our economy. I know that's been discussed and talked about in the testimony we've had today.

To each of the witnesses, what's the trajectory in terms of opportunity for travel to northern and remote communities for the Canadian economy? Are we on an upward trajectory? What do you see over the next five or 10 years?

[Nicholas Purich]

Many of Canada's northern communities have higher levels of population growth than southern communities. I believe that this, coupled with the need for access to critical goods by air transport, will continue to increase the requirement for air transportation to those communities.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Mr. Sparling, do you have any thoughts on that from an Air North perspective?

[Joseph Sparling]

The northern economies are all growing and the trajectory is positive. We've seen historical travel growth, and I think we'll continue to see it. The need to facilitate it and improve the infrastructure will only increase.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Mr. Gervais, would you comment?

[Bernard Gervais]

I have an answer for your question. The committee did a report on that, but it was from the Office of the Auditor General.

There was a report tabled in 2017. The OAG identified 117 airports that serve remote and northern communities, which are defined as “communities for which the only reliable year-round mode of transportation was by air.”

We're talking about 117 out there. Maybe there are more or maybe some are under the rising sea, but there were 117 airports at that time.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

That's a significant number for sure.

The study that we were previously looking at in this committee immediately prior to this one was with regard to competitiveness of air travel in Canada. We heard from WestJet and Air Canada the recommendation of a review of taxes, fees, service charges and the regulatory burdens that were compounding the competitiveness. We've heard testimony today, and some examples, with a lens in particular on northern and remote air travel.

Would you agree with that? Are there any further examples of fees and costs that you want to cite or that we want to reiterate for the purposes of this study?

I'll turn to Canadian North and then we'll go around the table.

[Nicholas Purich]

The increase in fees and costs we've seen over the last few years has made it more difficult to operate in many of our communities, specifically with air navigation costs, landing fees and charges. Just about every other fee and cost directly imposed by the government we do have to pass on to the travelling public, which makes it more difficult and may ultimately destroy travel demand by making it unaffordable.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Go ahead, Air North.

[Joseph Sparling]

The note about impacting demand is huge. Air travel is very price-elastic. The higher the cost, the less people are going to travel.

Part of this study was driven by the perception that domestic airfares are too high. Your market study, which I think is going to be part of the process, is going to disclose that the primary reason airfares are high is the cost of flying in Canada. If we get the costs down, the airfares will come down.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Sparling.

Mr. Iacono, you now have the floor for five minutes.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you, Mr. Chair.

My question is for Daniel Côté from the Union des municipalités du Québec.

According to your data, how many additional controllers would be needed to ensure optimal coverage at regional airports?

[Daniel Côté]

We don't have that number. We're generalists. Surely there are experts who could answer that question. What we do know is that there are service interruptions.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Were you consulted on business decisions when routes were cut?

[Daniel Côté]

No, we're informed, but we're never consulted. It's a purely private market that's unregulated. We're told when routes have been cut. We sometimes find out about changes in service when we book tickets, quite simply. Oftentimes we're not even informed of changes.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

That's interesting.

You mentioned private entities. I would remind you that airlines are private companies. So the Government of Canada can't really intervene and tell all the airlines how to manage their affairs or their way of doing things. It can only intervene on fares, and it already does that.

It's one thing to say that the government is doing nothing, but it's another thing to admit there are limits to what it can do. We have to consider what it can do to the airlines. For example, the federal government does a lot at airports. It has invested a lot of money in airports, and it did so during the pandemic to help companies and airports. So the government has taken action. You say that the government is not really there. That statement is a little too harsh, a little too unfair.

Do you think the airlines should be consulting with local communities?

[Daniel Côté]

They absolutely should.

I would like to respond to your other comments. Do you consider $38 million a year across Canada to be a major investment in infrastructure?

We estimate that this makes it possible to renovate about one Canadian airport a year. We don't see that as monumental.

You also have the power to regulate markets. The federal government made a decision several years ago to let the free market reign.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Since you mentioned some figures, you know how much our government has invested in all airports since 2015.

Are you aware of how much the previous government invested before 2015? Did it invest more? Did that government invest anything?

I ask because you're aware of what we're doing. How much was spent during that period? You're criticizing the amount invested by our government. You say it's not enough, but do you know how much the previous government invested during its 10 years in power?

[Daniel Côté]

I'm not looking to start a partisan war. We looked at the numbers and—

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

I'm asking you a legitimate question.

You're focused on numbers. I'm happy to let you know, but are you aware of the figures for the previous government?

[Daniel Côté]

Mr. Chair, I wish I had time to answer. It's a question of respect.

What we've documented is that the airport critical infrastructure program, or ACIP, has always received $38 million to $41 million per year for many years. Currently, the amount is $38 million. There are rumours that this number will drop to zero in the next few years. We hope not.

We're therefore lobbying for the current investment of $38 million to be increased. It used to be $41 million, which is not a huge amount either. The investment has always been $38 million to $41 million for about 10 years.

We haven't done a comprehensive study going back 100 years. Over the past 10 years, the investment has ranged from $38 million to $41 million.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

In your opinion, would putting a floor on regional fares be beneficial in terms of the competitiveness and accessibility of air transportation, or on the contrary, would it be detrimental?

[Daniel Côté]

The UMQ has studied the possibility of establishing a floor price. This could have a positive effect on small carriers, as it would prevent dumping by large carriers, which often crushes the competition. So a floor price can have a beneficial effect. A ceiling price can also be good for consumers.

We primarily believe in regulating markets. There should be an entity to establish the minimum services required in each of the regions. That would be the most profitable thing.

Upstream competition could be introduced through a bidding system, as a number of regions in the United States and Western Australia do, for example. These are fine models that the UMQ has documented.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Thank you for following that.

Through our chair, could you send us those examples, and mention which airports have implemented this practice?

[Daniel Côté]

I'd be delighted to do that. We asked professional firms to document it. We can provide you with the documentation.