Evidence of meeting #121 for Transport, Infrastructure and Communities in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was airports.
A recording is available from Parliament.
11:40 a.m.
Liberal
The Chair Liberal Peter Schiefke
No worries. Thank you, Mr. Wright. Unfortunately, because you're not here, I can't give you the 15-second warning. My apologies.
Mr. Iacono, the floor is yours for six minutes.
11:40 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Thank you, Mr. Chair.
Thanks to the witnesses for being here this morning.
Mr. Benedict, I'll start by congratulating you on your hard work in Quebec tourism. I know that you are very committed and that your leadership is making a difference.
Has the availability of flights to northern, rural and remote destinations in Quebec improved or declined in recent years?
11:40 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
Looking strictly at the numbers, in 2022, we returned to 76% of the flight volume we had before the pandemic. Those are the most recent figures we have. So we haven't returned to normal levels yet. Two years have elapsed since then and one wonders if the effects of the pandemic are still being felt or if it's a decline in flight availability. It's probably a combination of the two.
11:40 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
Honestly, I'd say that ticket prices are a problem. As I was saying earlier, we have $500 tickets in Quebec, but the program applies only to flights departing from Montreal, Quebec City and Saint-Hubert airport. So it doesn't apply to interregional flights.
11:40 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
I see.
Canadian airlines frequently offer all-inclusive packages for international destinations. Do they do that for regional tourist destinations in Quebec too?
11:40 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
There are some, but the flights aren't reliable. It's something you rarely see. Most international tourists visit Quebec's main regions. Ninety-eight per cent or 99% of the tourists who travel to remote regions are Quebeckers.
11:40 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
When you consult regional and sectoral tourism businesses and associations, does anyone suggest any potential solutions that would help air transport services meet the needs of tourism businesses?
11:40 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
Yes. The Quebec government has mandated that we administer a program. Two years ago, it invested $10 million to create new international connections. I'll tell you how that relates to regional tourism.
There are target markets in Mexico, France and certain places in the United States, for example, where people want more direct flights. The airlines can therefore make a request under this program, and if their request is granted, they get access to three types of funding. First, they can fund business plans to determine a new connection's viability. Second, a company can conduct a risk management exercise, by which I mean it can start up a new direct connection and, if it is profitable, the government will use funding from the program to cover the losses suffered by the airline. Third, the promotion of these flights can also be funded. Even if we create connections, people won't use them if they don't know they exist.
So three things can be done for international connections under this program. We think it would be possible to reproduce this model for regional flights and to create a program under which airlines could request access to regressive financing over five or three years, for example. In the first year, there can be a risk management exercise involving so many millions of dollars, and that number would decline each year until the connection is fully profitable and the company no longer needs public funding.
11:45 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Which of the three types of funding that you mentioned is used the most and is the most profitable?
11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
Risk management is definitely the type of funding most used because it's what airlines need most. They have to make sure they can offset losses when they have to finance flights that aren't full; they have to offset the lost revenue. These three types of financing are important, but I would say that 90% of the budget is really used for risk management.
11:45 a.m.
Liberal
11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
The Quebec government gave us a mandate to support the development of direct airlines to Quebec only two years ago. We had an initial budget of $10 million, but we have almost used it up.
11:45 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Has there been an increase in tourism and in the number of tourists who have shown up in Quebec in the past two years?
11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
We're talking about international flights here.
11:45 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
All right. We're really talking about international flights.
11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
That's correct.
The point I wanted to make is that we think this model could be reproduced for flights within Quebec or within another province in Canada, from major centres to the regions.
11:45 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
How do you see the future of regional air transport in Quebec? Why do you think it's important?
11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
As I said in my opening remarks, we view regional air transport as a service that's essential if we want to occupy the land. If there's no air transport to travel to the regions, that will undermine the vitality of those regions. We're convinced that tourism is the way to keep those regions alive and help them flourish. Consequently, we have to facilitate access to regional flights.
In Quebec right now, we have the Programme d'accès aérien aux régions, which I told you about and which offers $500 tickets. A number of airlines use this program, including Air Canada, Air Creebec, Air Inuit, Air Liaison, PAL Airlines and PASCAN Aviation. These are obviously companies of different sizes. We've observed that there's a need for airlines, but the fact that we need so many subsidies to fund ticket purchases so that people can travel to the regions is a problem. The situation isn't viable in the long term. When you say subsidies, you're talking about money out of taxpayers' pockets. These flights therefore have to become profitable.
11:45 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Earlier you said that both orders of government, federal and provincial, should work or co-operate more closely. Could you give us a few clues as to how those two orders of government can go about collaborating with your organization so we can stimulate the tourism industry?
June 11th, 2024 / 11:45 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
I'm going to cite a number from Air Canada as an example. A flight from Montreal to Rouyn-Noranda covers a distance of 640 kilometres. A flight from Washington to Charlotte, North Carolina, is also a 640-kilometre flight. To travel the same flight distance, you have to pay $158 in charges in Canada and $73 in the United States. It's more than double in Canada.
I don't want to get into the details of each of the charges, which include navigation charges, security fees, airport improvement fees and so on. There are, of course, good reasons for charging some of those fees, but when the companies we compete with can sell tickets for half price, because they offer fewer of them, the market is no longer competitive.
As I was saying, there's a certain irony involved in subsidizing ticket purchases. We're saying we're going to use taxpayers' money to subsidize the purchase of tickets that consumers otherwise can't afford so they can pay $500 for a ticket. At the same time, all kinds of fees are added and inflate ticket prices. And the problem gets many times worse if consumers want to travel to a destination that's not eligible for $500 tickets. So—
11:45 a.m.
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Benedict.
Mr. Lemire, the floor is yours for six minutes.
11:45 a.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
Mr. Benedict, I'm going to continue along the same lines as my colleague Mr. Iacono.
Which government do you think has jurisdiction over air transport? Is it normally a federal or a provincial jurisdiction?
11:50 a.m.
Vice-President, Public Affairs and Communications, Alliance de l'industrie touristique du Québec
I don't know if the objective is to start a fight over areas of responsibility, but I'm going to give you a somewhat political answer.
Land use, I think, is both a federal and provincial jurisdiction. We have a big country. Quebec is a big province that covers 1,500,000 square kilometres and has a population density of 5.6 inhabitants per square kilometre. It's completely disproportionate to other destinations that we compete with.
To digress somewhat from your question, our airports and access to our regions are also important from both federal and provincial standpoints. I don't think one government can leave full responsibility to the other.
11:50 a.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
I really like your answer, obviously.
What I can see is that the federal government does have a responsibility when it comes to finding solutions for regional air transport in Quebec. This is a federal area of jurisdiction, according to the British North America Act. Since there was no air transport in 1867, it's a federal jurisdiction.
If there's one government that has been proactive in this matter, it's Quebec's more so than Ottawa's. As the member for Abitibi—Témiscamingue, I challenge the federal government. I also find it interesting that you cited the example of a flight between Montreal and Rouyn-Noranda compared to one between Washington and Charlotte. In fact, it costs less to fly from Montreal to Paris than in the regions, and that's been the case for a long time.
To what extent do the concepts of user-payer and the free market limit the establishment of effective connections? What role can governments play in ensuring that the regions have access to affordable, reliable, frequent and efficient service? Do we have to change the paradigm once and for all?